G.R. No.

146650

January 13, 2003

DOLE PHILIPPINES, INC., petitioner,

vs.
PAWIS NG MAKABAYANG OBRERO (PAMAO-NFL), respondent.
CORONA, J.:
Before us is a petition for review filed under Rule 45 of the 1997 Rules of Civil Procedure, assailing the January 9, 2001
resolution of the Court of Appeals which denied petitioners motion for reconsideration of its September 22, 2000 decision1
which in turn upheld the Order issued by the voluntary arbitrator2 dated 12 October 1998, the dispositive portion of which
reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the complainant. Respondent is
hereby directed to extend the "free meal" benefit as provided for in Article XVIII, Section 3 of the collective bargaining
agreement to those employees who have actually performed overtime works even for exactly three (3) hours only.
SO ORDERED. 3
The core of the present controversy is the interpretation of the provision for "free meals" under Section 3 of Article XVIII of
the 1996-2001 Collective Bargaining Agreement (CBA) between petitioner Dole Philippines, Inc. and private respondent
labor union PAMAO-NFL. Simply put, how many hours of overtime work must a Dole employee render to be entitled to the
free meal under Section 3 of Article XVIII of the 1996-2001 CBA? Is it when he has rendered (a) exactly, or no less than,
three hours of actual overtime work or (b) more than three hours of actual overtime work?
The antecedents are as follows:
On February 22, 1996, a new five-year Collective Bargaining Agreement for the period starting February 1996 up to
February 2001, was executed by petitioner Dole Philippines, Inc., and private respondent Pawis Ng Makabayang ObreroNFL (PAMAO-NFL). Among the provisions of the new CBA is the disputed section on meal allowance under Section 3 of
Article XVIII on Bonuses and Allowances, which reads:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of TEN PESOS (P10.00)
to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE
MEALS, as presently practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3) hours of actual
overtime work.4
Pursuant to the above provision of the CBA, some departments of Dole reverted to the previous practice of granting free
meals after exactly three hours of actual overtime work. However, other departments continued the practice of granting free
meals only after more than three hours of overtime work. Thus, private respondent filed a complaint before the National
Conciliation and Mediation Board alleging that petitioner Dole refused to comply with the provisions of the 1996-2001 CBA
because it granted free meals only to those who rendered overtime work for more than three hours and not to those who
rendered exactly three hours overtime work.
The parties agreed to submit the dispute to voluntary arbitration. Thereafter, the voluntary arbitrator, deciding in favor of the
respondent, issued an order directing petitioner Dole to extend the "free meal" benefit to those employees who actually did
overtime work even for exactly three hours only.
Petitioner sought a reconsideration of the above order but the same was denied. Hence, petitioner elevated the matter to
the Court of Appeals by way of a petition for review on certiorari.
On September 22, 2000, the Court of Appeals rendered its decision upholding the assailed order.
Thus, the instant petition.
Petitioner Dole asserts that the phrase "after three hours of actual overtime work" should be interpreted to mean after more
than three hours of actual overtime work.

On the other hand, private respondent union and the voluntary arbitrator see it as meaning after exactly three hours of
actual overtime work.
The "meal allowance" provision in the 1996-2001 CBA is not new. It was also in the 1985-1988 CBA and the 1990-1995
CBA. The 1990-1995 CBA provision on meal allowance was amended by the parties in the 1993-1995 CBA Supplement.
The clear changes in each CBA provision on meal allowance were in the amount of the meal allowance and free meals,
and the use of the words "after" and "after more than" to qualify the amount of overtime work to be performed by an employee
to entitle him to the free meal.
To arrive at a correct interpretation of the disputed provision of the CBA, a review of the pertinent section of past CBAs is
in order.
The CBA covering the period 21 September 1985 to 20 September 1988 provided:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of FOUR (P4.00) PESOS
to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE
MEALS, as presently practiced, after THREE (3) hours of actual overtime work."5
The CBA for 14 January 1990 to 13 January 1995 likewise provided:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL ALLOWANCE of EIGHT PESOS (P8.00)
to all employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE
MEALS, as presently practiced, not exceeding SIXTEEN PESOS (P16.00) after THREE (3) hours of actual overtime
work."6
The provision above was later amended when the parties renegotiated the economic provisions of the CBA pursuant to
Article 253-A of the Labor Code. Section 3 of Article XVIII of the 14 January 1993 to 13 January 1995 Supplement to the
1990-1995 CBA reads:
Section 3. MEAL ALLOWANCE. The COMPANY agrees to grant a MEAL SUBSIDY of NINE PESOS (P9.00) to all
employees who render at least TWO (2) hours or more of actual overtime work on a workday, and FREE MEALS,
as presently practiced, not exceeding TWENTY ONE PESOS (P21.00) after more than THREE (3) hours of actual
overtime work (Section 3, as amended)."7
We note that the phrase "more than" was neither in the 1985-1988 CBA nor in the original 1990-1995 CBA. It was inserted
only in the 1993-1995 CBA Supplement. But said phrase is again absent in Section 3 of Article XVIII of the 1996-2001 CBA,
which reverted to the phrase "after three (3) hours".
Petitioner asserts that the phrase "after three (3) hours of actual overtime work" does not mean after exactly three hours of
actual overtime work; it means after more than three hours of actual overtime work. Petitioner insists that this has been the
interpretation and practice of Dole for the past thirteen years.
Respondent, on the other hand, maintains that "after three (3) hours of actual overtime work" simply means after rendering
exactly, or no less than, three hours of actual overtime work.
The Court finds logic in private respondents interpretation.
The omission of the phrase "more than" between "after" and "three hours" in the present CBA spells a big difference.
No amount of legal semantics can convince the Court that "after more than" means the same as "after".
Petitioner asserts that the "more than" in the 1993-1995 CBA Supplement was mere surplusage because, regardless of the
absence of said phrase in all the past CBAs, it had always been the policy of petitioner corporation to give the meal
allowance only after more than 3 hours of overtime work. However, if this were true, why was it included only in the 19931995 CBA Supplement and the parties had to negotiate its deletion in the 1996-2001 CBA?
Clearly then, the reversion to the wording of previous CBAs can only mean that the parties intended that free meals be
given to employees after exactly, or no less than, three hours of actual overtime work.

The disputed provision of the CBA is clear and unambiguous. The terms are explicit and the language of the CBA is not
susceptible to any other interpretation. Hence, the literal meaning of "free meals after three (3) hours of overtime work" shall
prevail, which is simply that an employee shall be entitled to a free meal if he has rendered exactly, or no less than, three
hours of overtime work, not "after more than" or "in excess of" three hours overtime work.
Petitioner also invokes the well-entrenched principle of management prerogative that "the power to grant benefits over and
beyond the minimum standards of law, or the Labor Code for that matter, belongs to the employer x x x". According to this
principle, even if the law is solicitous of the welfare of the employees, it must also protect the right of the employer to exercise
what clearly are management prerogatives.8 Petitioner claims that, being the employer, it has the right to determine whether
it will grant a "free meal" benefit to its employees and, if so, under what conditions. To see it otherwise would amount to an
impairment of its rights as an employer.
We do not think so.
The exercise of management prerogative is not unlimited. It is subject to the limitations found in law, a collective bargaining
agreement or the general principles of fair play and justice.9 This situation constitutes one of the limitations. The CBA is the
norm of conduct between petitioner and private respondent and compliance therewith is mandated by the express policy of
the law.10
Petitioner Dole cannot assail the voluntary arbitrators interpretation of the CBA for the supposed impairment of its
management prerogatives just because the same interpretation is contrary to its own.
WHEREFORE, petition is hereby denied.
SO ORDERED.
Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

G.R. No. 92009

February 17, 1993

MASTER IRON LABOR UNION (MILU), WILFREDO ABULENCIA, ROGELIO CABANA, LOPITO SARANILLA, JESUS
MOISES, BASILIO DELA CRUZ, EDGAR ARANES, ELY BORROMEO, DANIEL BACOLON, MATIAS PAJIMULA,
RESTITUTO PAYABYAB, MELCHOR BOSE, TEOFILO ANTOLIN, ROBERT ASPURIA, JUSTINO BOTOR, ALFREDO
FABROS, AGAPITO TABIOS, BENARDO ALFON, BENIGNO BARCENA, BERNARDO NAVARRO, MOISES
LABRADOR, ERNESTO DELA CRUZ, EDUARDO ESPIRITU, IGNACIO PAGTAMA, BAYANI PEREZ, SIMPLICIO
PUASO, EDWIN VELARDE, BEATO ABOGADO, DANILO SAN ANTONIO, BERMESI BORROMEO, and JOSE
BORROMEO, petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and MASTER IRON WORKS AND CONSTRUCTION
CORPORATION, respondents.
Banzuela, Flores, Mirrales, Raeses, Sy, Taquio and Associates for petitioners.
Carlos L. Galarrita for private respondent.
MELO, J.:
The petition for certiorari before us seeks to annul and to set aside the decision of the National Labor Relations Commission
(Second Division) dated July 12, 1986 which affirmed that of Labor Arbiter Fernando V. Cinco declaring illegal the strike
staged by petitioners and terminating the employment of the individual petitioners.
The Master Iron Works Construction Corporation (Corporation for brevity) is a duly organized corporate entity engaged in
steel fabrication and other related business activities. Sometime in February 1987, the Master Iron Labor Union (MILU)
entered into a collective barganing agreement (CBA) with the Corporation for the three-year period between December 1,
1986 and November 30, 1989 (Rollo, p. 7). Pertinent provisions of the CBA state:
Sec. 1. That there shall be no strike and no lockout, stoppage or shutdown of work, or any other interference
with any of the operation of the COMPANY during the term of this AGREEMENT, unless allowed and
permitted by law.
Sec. 2. Service Allowance The COMPANY agrees to continue the granting of service allowance of
workers assigned to work outside the company plant, in addition to his daily salary, as follows:
(a) For those assigned to work outside the plant within Metro Manila, the service allowance
shall be P12.00;
(b) For those assigned to work outside Metro Manila, the service allowance shall be
P25.00/day;
(c) The present practice of conveying to and from jobsites of workers assigned to work
outside of the company plant shall be maintained.
Right after the signing of the CBA, the Corporation subcontracted outside workers to do the usual jobs done by its regular
workers including those done outside of the company plant. As a result, the regular workers were scheduled by the
management to work on a rotation basis allegedly to prevent financial losses thereby allowing the workers only ten (10)
working days a month (Rollo, p. 8). Thus, MILU requested implementation of the grievance procedure which had also been
agreed upon in the CBA, but the Corporation ignored the request.
Consequently,
on
April
8,
1987,
MILU
filed
a
notice
of
strike
(Rollo,
p. 54) with the Department of Labor and Employment. Upon the intervention of the DOLE, through one Atty. Bobot
Hernandez, the Corporation and MILU reached an agreement whereby the Corporation acceded to give back the usual
work to its regular employees who are members of MILU (Rollo, p. 55).
Notwithstanding said agreement, the Corporation continued the practice of hiring outside workers. When the MILU
president, Wilfredo Abulencia, insisted in doing his regular work of cutting steel bars which was being done by casual
workers, a supervisor reprimanded him, charged him with insubordination and suspended him for three (3) days (Rollo, pp.
9 & 51-52). Upon the request of MILU, Francisco Jose of the DOLE called for conciliation conferences. The Corporation,

however, insisted that the hiring of casual workers was a management prerogative. It later ignored subsequent scheduled
conciliation conferences (Rollo, pp. 51-52 & 57-58).
Hence, on July 9, 1987, MILU filed a notice of strike on the following grounds: (a) violation of CBA; (b) discrimination; (c)
unreasonable suspension of union officials; and (d) unreasonable refusal to entertain grievance (Rollo,
p. 9). On July 24, 1987, MILU staged the strike, maintaining picket lines on the road leading to the Corporation's plant
entrance and premises.
At about 11 o'clock in the morning of July 28, 1987, CAPCOM soldiers, who had been summoned by the Corporation's
counsel, came and arrested the picketers. They were brought to Camp Karingal and, the following day, to the Caloocan
City jail. Charges for illegal possession of firearms and deadly weapons were lodged against them. Later, however, those
charges were dismissed for failure of the arresting CAPCOM soldiers to appear at the investigation (Rollo, p. 10). The
dispersal of the picketlines by the CAPCOM also resulted in the temporary lifting of the strike.
On August 4, 1987, the Corporation filed with the NLRC National Capital Region arbitration branch a petition to declare the
strike
illegal
(Rollo,
p. 40). On September 7, 1987, MILU, with the assistance of the Alyansa ng Manggagawa sa Valenzuela (AMVA), re-staged
the strike. Consequently, the Corporation filed a petition for injunction before the NLRC which, on September 24, 1987,
issued an order directing the workers to remove the barricades and other obstructions which prevented ingress to and
egress from the company premises. The workers obliged on October 1, 1987 (Rollo, p. 25). On October 22, 1987, through
its president, MILU offered to return to work in a letter which states:
22 Okt. 1987
Mr. Elieze Hao
Master Iron Works & Construction Corp.
790 Bagbagin, Caloocan City
Dear Sir:
Ang unyon, sa pamamagitan ng nakalagda sa ibaba, ay nagmumungkahi, nagsusuhestiyon o nag-oofer sa
inyong pangasiwaan ng aming kahilingan na bumalik na sa trabaho dahilan din lang sa kalagayan na tuloy
tuloy ang ating pag-uusap para sa ikatitiwasay ng ating relasyon. Gusto naming manatili ang ating
magandang pagtitinginan bilang magkasangga para sa ika-uunlad ng ating kumpanya. Sana ay unawain
niyo kami dahil kailangan namin ng trabaho.
Gumagalang,
(Sgd.)
WILFREDO ABULENCIA
Pangulo
(Rollo, p. 590)
On October 30, 1987, MILU filed a position paper with counter-complaint before the NLRC. In said counter-complaint, the
workers charged the Corporation with unfair labor practice for subcontracting work that was normally done by its regular
workers thereby causing the reduction of the latter's workdays; illegal suspension of Abulencia without any investigation;
discrimination for hiring casual workers in violation of the CBA, and illegal dispersal of the picket lines by CAPCOM agents
(Rollo, pp. 26-27).
In due course, a decision dated March 16, 1988 was rendered by Labor Arbiter Fernando Cinco declaring illegal the strike
staged by MILU. The dispositive portion of the decision reads:
WHEREFORE, in the light of the foregoing premises, judgment is hereby rendered, as follows:

1. Declaring the strike by the respondents illegal and unlawful;

2. Ordering the cancellation of the registered permit of respondent union MILU for having committed an
illegal strike;
3. Ordering the termination of employment status of the individual respondents, including the forfeiture of
whatever benefits are due them under the law, for having actively participated in an illegal strike, namely:
Wilfredo Abulencia, President; Rogelio Cabana, Vice-President; Lopito Saranilla, Secretary; Jesus Moises,
Treasurer; Basilio dela Cruz, Auditor; as Members of the Board: Edgar Aranes, Melchor Bose, Restituto
Payabyab, Matias Pajimula, Daniel Bacolon, and Ely Borromeo, as Members of the Union: Teofilo Antolin,
Robert Aspuria, Justino Botor, Alfredo Fabros, Agapito Tabios, Bernardo Alfon, Benigno Barcena, Bernardo
Navaro, Moises Labrador, Ernesto dela Cruz, Eduardo Espiritu, Ignacio Pagtama, Bayani Perez, Simplicio
Puaso, Edwin Velarde, Beato Abogado, Danila San Antonio, Bermes Borromeo and Jose Borromeo.
The respondents as appearing in Annex "A" of the Petition, but not included as among those whose
employment status were not terminated as above-mentioned, are given priority of reinstatement, without
backwages, in the event petitioner starts its normal operations, or shall be paid their separation pay
according to law.
4. Ordering the respondents to cease and desist from further committing the illegal acts complained of;
5. Ordering Respondent Union to pay the amount of P10,000.00 to Petitioner's Counsel as attorney's fees;
6. Ordering the dismissal of the claim for damages for lack of merit; and
7. Ordering the dismissal of the counter-complaint in view of the filing of a separate complaint by the
respondents.
SO ORDERED. (pp. 35-36, Rollo.)
On appeal to the NLRC, MILU and the individual officers and workers named in Labor Arbiter Cinco's decision alleged that
said labor arbiter gravely abused his discretion and exhibited bias in favor of the Corporation in disallowing their request to
cross-examine the Corporation's witnesses, namely, Corporate Secretary Eleazar Hao, worker Daniel Ignacio and foreman
Marcial Barcelon, who all testified on the manner in which the strike was staged and on the coercion and intimidation
allegedly
perpetrated
by
the
strikers
(Rollo,
p. 151).
The Second Division of the NLRC affirmed with modifications the decision of the labor arbiter. The decision, which was
promulgated on July 12, 1989 with Commissioners Domingo H. Zapanta and Oscar N. Abella concurring and Commissioner
Daniel M. Lucas, Jr. dissenting, disagreed with the labor arbiter on the "summary execution of the life of Master Iron Labor
Union (MILU)" on the grounds that the Corporation did not specifically pray for the cancellation of MILU's registration and
that pursuant to Articles 239 and 240 of the Labor Code, only the Bureau of Labor Relations may cancel MILU's license or
certificate of registration. It also deleted the award of P10,000.00 as attorney's fees for lack of sufficient basis but it affirmed
the labor arbiter with regard to the declaration of illegality of the strike and the termination of employment of certain
employees and the rest of the dispositive portion of the labor arbiter's decision (Rollo, pp. 48-49).
In his dissent, Commissioner Lucas stated that he is "for the setting aside of the decision appealed from, and remanding of
the case to the labor arbiter of origin, considering the respondent's countercharge or complaint for unfair labor practice was
not resolved on the merits" (Rollo, p. 49).
MILU filed a motion for the reconsideration but the same was denied by the NLRC for lack of merit in its Resolution of
August 9, 1989 (Rollo, p. 50). Hence, the instant petition. 1
Petitioners contend that notwithstanding the non-strike provision in the CBA, the strike they staged was legal because the
reasons therefor are non-economic in nature. They assert that the NLRC abused its discretion in holding that there was
"failure to exhaust the provision on grievance procedure" in view of the fact that they themselves sought grievance meetings
but the Corporation ignored such requests. They charge the NLRC with bias in failing to give weight to the fact that the
criminal charges against the individual petitioners were dismissed for failure of the CAPCOM soldiers to testify while the

same individual strikers boldly faced the charges against them. Lastly, they aver that the NLRC abused its discretion in
holding that the workers' offer to return to work was conditional.
In holding that the strike was illegal, the NLRC relied solely on the no-strike no-lockout provision of the CBA aforequoted.
As this Court has held in Philippine Metal Foundries, Inc. vs. CIR (90 SCRA 135 [1979]), a no-strike clause in a CBA is
applicable only to economic strikes. Corollarily, if the strike is founded on an unfair labor practice of the employer, a strike
declared by the union cannot be considered a violation of the no-strike clause.
An economic strike is defined as one which is to force wage or other concessions from the employer which he is not required
by law to grant (Consolidated Labor Association of the Philippines vs. Marsman & Co., Inc., 11 SCRA 589 [1964]). In this
case, petitioners enumerated in their notice of strike the following grounds: violation of the CBA or the Corporation's practice
of subcontracting workers; discrimination; coercion of employees; unreasonable suspension of union officials, and
unreasonable refusal to entertain grievance.
Private respondent contends that petitioner's clamor for the implementation of Section 2, Article VIII of the CBA on service
allowances granted to workers who are assigned outside the company premises is an economic issue (Rollo, p. 70). On
the contrary, petitioners decry the violation of the CBA, specifically the provision granting them service allowances.
Petitioners are not, therefore, already asking for an economic benefit not already agreed upon, but are merely asking for
the implementation of the same. They aver that the Corporation's practice of hiring subcontractors to do jobs outside of the
company premises was a way "to dodge paying service allowance to the workers" (Rollo, pp. 61 & 70).
Much more than an economic issue, the said practice of the Corporation was a blatant violation of the CBA and unfair
labor practice on the part of the employer under Article 248(i) of the Labor Code. Although the end result, should the
Corporation be required to observe the CBA, may be economic in nature because the workers would then be given their
regular working hours and therefore their just pay, not one of the said grounds is an economic demand within the meaning
of the law on labor strikes. Professor Perfecto Fernandez, in his book Law on Strikes, Picketing and Lockouts (1981 edition,
pp. 144-145), states that an economic strike involves issues relating to demands for higher wages, higher pension or
overtime rates, pensions, profit sharing, shorter working hours, fewer work days for the same pay, elimination of night work,
lower retirement age, more healthful working conditions, better health services, better sanitation and more safety appliances.
The demands of the petitioners, being covered by the CBA, are definitely within the power of the Corporation to grant and
therefore the strike was not an economic strike.
The other grounds, i.e., discrimination, unreasonable suspension of union officials and unreasonable refusal to entertain
grievance, had been ventilated before the Labor Arbiter. They are clearly unfair labor practices as defined in Article 248 of
the Labor Code. 2 The subsequent withdrawal of petitioners' complaint for unfair labor practice (NLRC-NCR Case No. 0011-04132-87) which was granted by Labor Arbiter Ceferina Diosana who also considered the case closed and terminated
(Rollo, pp. 97 & 109) may not, therefore, be considered as having converted their other grievance into economic demands.
Moreover, petitioners staged the strike only after the Corporation had failed to abide by the agreement forged between the
parties upon the intervention of no less than the DOLE after the union had complained of the Corporation's unabated
subcontracting of workers who performed the usual work of the regular workers. The Corporation's insistence that the hiring
of casual employees is a management prerogative betrays its attempt to coat with legality the illicit curtailment of its
employees' rights to work under the terms of the contract of employment and to a fair implementation of the CBA.
While it is true that an employer's exercise of management prerogatives, with or without reason, does not per se constitute
unjust discrimination, such exercise, if clearly shown to be in grave abuse of discretion, may be looked into by the courts
(National Federation of Labor Unions vs. NLRC, 202 SCRA 346 [1991]). Indeed, the hiring, firing, transfer, demotion, and
promotion of employees are traditionally identified as management prerogatives. However, they are not absolute
prerogatives. They are subject to limitations found in law, a collective bargaining agreement, or general principles of fair
play and justice (University of Sto. Tomas vs. NLRC, 190 SCRA 758 [1990] citing Abbott Laboratories [Phil.], Inc. vs. NLRC,
154 SCRA 713 [1987]). The Corporation's assertion that it was exercising a management prerogative in hiring outside
workers being contrary to the contract of employment which, of necessity, states the expected wages of the workers, as
well as the CBA, is therefore untenable.
Private respondent's failure to traverse petitioners' allegations that the NLRC abused its discretion in holding that the
provision on grievance procedure had not been exhausted clearly sustains such allegation and upholds the petitioners'
contention that the Corporation refused to undergo said procedure. It should be remembered that a grievance procedure is
part of the continuous process of collective bargaining (Republic Savings Bank. vs. CIR, et al., 21 SCRA 226 [1967]). It is
intended to promote a friendly dialogue between labor and management as a means of maintaining industrial peace. The

Corporation's refusal to heed petitioners' request to undergo the grievance procedure clearly demonstrated its lack of intent
to abide by the terms of the CBA.
Anent the NLRC's finding that Abulencia's offer to return to work is conditional, even a cursory reading of the letter
aforequoted would reveal that no conditions had been set by petitioners. It is incongruous to consider as a "condition" the
statement therein that the parties would continue talks for a peaceful working relationship ("tuloy tuloy ang ating pag-uusap
sa ikatitiwasay ng ating relasyon"). Conferences form part of the grievance procedure and their mere mention in Abulencia's
letter did not make the same "conditional".
In the same manner, the following findings of the Labor Arbiter showed the illegal breakup of the picket lines by the
CAPCOM:
d) On 28 July 1987, CAPCOM soldiers, on surveillance mission, arrived at the picket line of respondents
and searches were made on reported deadly weapons and firearms in the possession of the strikers.
Several bladed weapons and firearms in the possession of the strikers were confiscated by the CAPCOM
soldiers, as a result of which, the apprehended strikers were brought to Camp Tomas Karingal in Quezon
City for proper investigation and filing of the appropriate criminal charges against them. The strikers who
were charged of illegal possession of deadly weapon and firearms were: Edgar Aranes, Wilfredo Abulencia,
Ernesto dela Cruz, Beato Abogado, Lopito Saranilla, Restituto Payabyab, Jose Borromeo and Rogelio
Cabana. Criminal informations were filed by Inquest Fiscal, marked as Exhibits "E", "E-1 to E-8". These
strikers were jailed for sometime until they were ordered release after putting up the required bail bond.
Other strikers were also arrested and brought to Camp Tomas Karingal, and after proper investigation as
to their involvement in the offense charged, they were released for lack of prima facie evidence. They were
Edwin Velarde, Bayani Perez, Daniel Bacolon, Jesus Moises, Robert Aspurias and Benigno Barcena.
After the strikers who were arrested were brought to Camp Tomas Karingal on 28 July 1987, the rest of the
strikers removed voluntarily their human and material barricades which were placed and posted at the road
leading to the premises of the Company. (Rollo, p. 32)
The bringing in of CAPCOM soldiers to the peaceful picket lines without any reported outbreak of violence, was clearly in
violation of the following prohibited activity under Article 264 of the Labor Code:
(d) No public official or employee, including officers and personnel of the New Armed Forces of the
Philippines or the Integrated National Police, or armed person, shall bring in, introduce or escort in any
manner any individual who seeks to replace strikers in entering or leaving the premises of a strike area, or
work in place of the strikers. The police force shall keep out of the picket lines unless actual violence or
other criminal acts occur therein; Provided, That nothing herein shall be interpreted to prevent any public
officer from taking any measure necessary to maintain peace and order, protect life and property, and/or
enforce the law and legal order. (Emphasis supplied.)
As the Labor Arbiter himself found, no pervasive or widespread coercion or violence were perpetrated by the petitioners as
to warrant the presence of the CAPCOM soldiers in the picket lines. In this regard, worth quoting is the following excerpt of
the decision in Shell Oil Workers' Union vs. Shell Company of the Philippines, Ltd., 39 SCRA 276 [1971], which was decided
by the Court under the old Industrial Peace Act but which excerpt still holds true:
. . . What is clearly within the law is the concerted activity of cessation of work in order that . . . employer
cease and desist from an unfair labor practice. That the law recognizes as a right. There is though a
disapproval of the utilization of force to attain such an objective. For implicit in the very concept of the legal
order is the maintenance of peaceful ways. A strike otherwise valid, if violent in character, may be placed
beyond the pale. Care is to be taken, however, especially where an unfair labor practice is involved, to
avoid stamping it with illegality just because it is tainted with such acts. To avoid rendering illusory the
recognition of the right to strike, responsibility in such a case should be individual and not collective. A
different conclusion would be called for, of course, if the existence of force while the strike lasts is pervasive
and widespread, consistently and deliberately resorted to as a matter of policy. It could be reasonably
concluded then that even if justified as to ends, it becomes illegal because of the means employed. (at p.
292.)
All told, the strike staged by the petitioners was a legal one even though it may have been called to offset what the strikers
believed in good faith to be unfair labor practices on the part of the employer (Ferrer, et al. vs. Court of Industrial Relations,
et al., 17 SCRA 352 [1966]). Verily, such presumption of legality prevails even if the allegations of unfair labor practices are

subsequently found out to be untrue (People's Industrial and Commercial Employees and Workers Org. [FFW] vs. People's
Industrial and Commercial Corporation, 112 SCRA 440 [1982]). Consonant with these jurisprudential pronouncements, is
Article 263 of the Labor Code which clearly states "the policy of the State to encourage free trade unionism and free
collective bargaining". Paragraph (b) of the same article guarantees the workers' "right to engage in concerted activities for
purposes of collective bargaining or for their mutual benefit and protection" and recognizes the "right of legitimate labor
organizations to strike and picket and of employers to lockout" so long as these actions are "consistent with the national
interest" and the grounds therefor do not involve inter-union and intra-union disputes.
The strike being legal, the NLRC gravely abused its discretion in terminating the employment of the individual petitioners,
who, by operation of law, are entitled to reinstatement with three years backwages. Republic Act No. 6715 which amended
Art. 279 of the Labor Code by giving "full backwages inclusive of allowances" to reinstated employees, took effect fifteen
days from the publication of the law on March 21, 1989. The decision of the Labor Arbiter having been promulgated on
March 16, 1988, the law is not applicable in this case.
WHEREFORE, the questioned decision and resolution of the NLRC as well as the decision of the Labor Arbiter are hereby
SET ASIDE and the individual petitioners are reinstated to their positions, with three years backwages and without loss of
seniority rights and other privileges. Further, respondent corporation is ordered to desist from subcontracting work usually
performed by its regular workers.
SO ORDERED.
Feliciano, Bidin, Davide, Jr. and Romero, JJ., concur.
Gutierrez, Jr., J., is on leave.

G.R. No. 152214

September 19, 2006

EQUI-ASIA PLACEMENT, INC., petitioner,

vs.
DEPARTMENT OF FOREIGN AFFAIRS (DFA) represented by the HON. DOMINGO L. SIAZON, JR., SECRETARY,
DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE), represented by HON. BIENVENIDO LAGUESMA,
respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari of the Decision dated 4 October 20011 and Resolution dated 18 February 2002 of
the Court of Appeals in CA-G.R. SP No. 61904. The Decision denied petitioner's petition for certiorari while the Resolution
denied its Motion for Reconsideration.
The Court of Appeals summarized the facts of this case in this wise:
On September 16, 2000, Manny dela Rosa Razon, a native of Lemery, Batangas and an overseas Filipino worker,
died of acute cardiac arrest while asleep at the dormitory of the Samsong Textile Processing Factory in South
Korea. Informed thereof, the Philippine Overseas Labor Office (POLO) at South Korea immediately relayed the
incident to the Philippine Embassy in South Korea. Forthwith, the [Labor] Attach of the Philippine Embassy
dispatched a letter to Eleuterio N. Gardiner, administrator of the Overseas Workers Welfare Administration
(OWWA). The letter reads:
"VERY URGENT, POLO has recently received a report that OFW Manny dela Rosa RAZON, an
undocumented worker, died last Saturday, 16 September, from an apparent pancreatic attack or
'bangungot.'
According to the verbal reports of Moises and Ronald Recarde, Manny's co-workers, he was found already
lifeless inside their quarters at around 11:00 in the morning of the above date. They rushed him to Uri
Hospital where the Doctor declared him dead on arrival.
Per information gathered, the deceased is single, 29 years old, from Bukal, Lemery, Batangas. His next-ofkins are Mrs. Rowena Razon (Auntie) and Mr. Razon (Uncle) with telephone number (043)411-2308.
POLO is awaiting signed statements from the aforementioned workers who promised to send it by fax this
afternoon.
We are also coordinating with the deceased's employer for documentation requirements and financial
assistance for the repatriation of the remains.
We will highly appreciate if Home Office could advise the next-of-kins of the urgent need to issue a Special
Power of Attorney (SPA) to facilitate the repatriation requirements of the subject.
In anticipation of the next-of-kins' likely move to seek financial assistance from OWWA for the repatriation
of their loved [one], please be advised in advance that we will need about US$4,000.00 to repatriate the
cadaver (to include hospital and morgue costs) to Manila. xxx"
In turn, the OWWA, through Atty. Cesar L. Chavez, indorsed the matter, for appropriate action, to Director R. Casco
of the Welfare Employment Office of the Philippine Overseas Employment Administration (WEO-POEA).
Upon verification by the WEO-POEA on its data base, it was discovered that Manny Razon was recruited and
deployed by petitioner Equi-Asia Placement, Inc., and was sent to South Korea on April 3, 2000 to work-train at
Yeongjin Machinery, Inc. Thereupon, POEA addressed the herein first assailed telegram-directive dated September
22, 2000 to the President/General Manager of the petitioner. We quote the telegram:
"PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE REPATRIATION OF REMAINS AND
BELONGINGS OF OFW MANNY DELA ROSA RAZON AS PER REQUEST OF PHILIPPINE EMBASSY,

KOREA, YOU CAN COORDINATE WITH YOUR FOREIGN EMPLOYER AND TO WAD/OWWA (MLA) AS
REGARDS TO THIS MATTER. YOU ARE GIVEN TWO (2) DAYS FROM RECEIPT HEREOF WITHIN
WHICH TO PROVIDE SAID TICKET AND ASSISTANCE, KINDLY SUBMIT YOUR REPORT TO
ASSISTANCE AND WELFARE DIVISION (AWD), 2/F POEA, FAILURE TO DO SO WILL CONSTRAIN US
TO IMPOSE APPROPRIATE SANCTION UNDER OUR RULES"
Responding thereto, petitioner, thru its President Daniel Morga, Jr., faxed on September 26, 2000 the following
message to the Assistance and Welfare Division of the POEA:
"In connection with your telegram, dated 09/22/2000, requiring us to report the circumstances surrounding
the death of OFW MANNY DELA ROSA RAZON in Korea and requesting us to issue a PTA, etc., for the
repatriation of the remains of said OFW, this is to report to your good office the following:
1. The deceased was deployed by our agency on April 3, 2000 to Yeongjin Machine Company in South
Korea;
2. He violated his employment/training/dispatching contracts on June 25, 2000 by unlawfully
escaping/running away (TNT) from his company assignment without prior KFSMB authorization and
working/staying in unknown company/place;
3. He allegedly died of 'bangungot' thereafter;
In view thereof, we cannot heed your requests as embodied in your telegram. However, his relatives can
avail of the benefits provided for by OWWA in cases involving undocumented/illegal Filipino workers
abroad.
Trusting for your kind understanding"
On the same date September 26, 2000 Director Ricardo R. Casco of the WEO-POEA sent to the petitioner the
herein second assailed letter-directive, which pertinently reads:
"We have received a copy of your fax message dated 26 September 2000 as regards to your response to
our request for PTA for aforesaid deceased OFW. Nevertheless, may we remind you that pursuant to
Sections 52, 53, 54 and 55 of the Implementing Rules Governing RA 8042, otherwise known as the Migrant
Workers and Overseas Filipino Act of 1995, the repatriation of OFW, his/her remains and transport of his
personal effects is the primary responsibility of the principal or agency and to immediately advance the cost
of plane fare without prior determination of the cause of worker's repatriation. The Rules further provide for
the procedure to be followed in cases when the foreign employer/agency fails to provide for the cost of the
repatriation, compliance of which is punishable by suspension of the license of the agency or such sanction
as the Administration shall deem proper. Hence, you are required to provide the PTA for the deceased
OFW in compliance with the requirement in accordance with R.A. 8042. You are given forty-eight (48) hours
upon receipt hereof within which to provide said ticket. Failure in this regard will constrain us to impose the
appropriate sanction under our rules."
On September 27, 2000, petitioner wrote back Director Ricardo R. Casco, thus:
"In connection with your fax letter dated September 26, 2000, re: the repatriation of the remains of the
deceased, ex-trainee (OFW) MANNY DELA ROSA RAZON, please be informed that the provisions of
Section 53 as well as, and in relation to, Section 55 of the Omnibus Rules and Regulations Implementing
the Migrant Workers and Overseas Filipinos Act of 1995 on the matters covering the following:
1. The responsibility of the agency to advance the cost of plane fare without prior determination of
the cause of the deceased worker's termination.
2. The recovery of the same costs from the estate of the dead worker before the NLRC.
3. The action to be imposed by POEA for non-compliance therewith within 48 hours are violative of
due process and/or the principle on due delegation of power.

This is so because Sec. 15 of R.A. 8042 clearly contemplates prior notice and hearing before responsibility
thereunder could be established against the agency that sets up the defense of sole fault in avoidance of
said responsibility -. Besides, the sections in question unduly grant the powers to require advance payment
of the plane fare, to impose the corresponding penalty of suspension in case of non-compliance therewith,
within 48 hours and to recover said advance payment from the dead worker's estate upon the return of his
remains to the country before the NLRC, when the law itself does not expressly provide for the grant of
such powers.
x x x x x x x x x.
Please provide us immediately with the death certificate/post mortem report/police report pertinent to above
as proof of death and cause thereof."
Nonetheless, and apprehensive of the adverse repercussions which may ensue on account of its non-compliance
with the directive, petitioner, on September 29, 2000, advanced under protest the costs for the repatriation of the
remains of the late Manny dela Rosa Razon.
Thereafter, petitioner went to this Court via the instant petition for certiorari, posing, for Our consideration, the sole
issue of
"WHETHER OR NOT SECTIONS 52, 53, 54 AND 55 OF THE OMNIBUS RULES AND REGULATIONS
IMPLEMENTING THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 (R.A. 8042),
ISSUED BY DFA AND POEA, WHICH POEA SUMMARILY ORDERED THE HEREIN PETITIONER TO
COMPLY VIZ-A-VIZ THE PAYMENT IN ADVANCE OF THE EXPENSES FOR THE REPATRIATION OF
THE REMAINS OF A DECEASED WORKER-TRAINEE WHO, AT THE TIME OF HIS DEATH, HAS NO
EXISTING EMPLOYMENT (DISPATCHING) CONTRACT WITH EITHER SAID PETITIONER OR HIS
FOREIGN PRINCIPAL AND NO VALID VISA OR IS NOT WORKING WITH THE FOREIGN PRINCIPAL
TO WHICH PETITIONER DEPLOYED HIM, IS ILLEGAL AND/OR VIOLATIVE OF DUE PROCESS SUCH
THAT POEA ACTED WITHOUT [OR IN] EXCESS OF ITS JURISDICTION AND/OR IN GRAVE ABUSE
OF DISCRETION IN ISSUING SAID ORDER TO PAY SAID EXPENSES."2
On 4 October 2001, the Court of Appeals rendered the Decision which is now the subject of the present petition. The
dispositive portion of the Court of Appeals' Decision states:
WHEREFORE, for lack of merit, the instant petition is DENIED and is accordingly DISMISSED.3
In dismissing the petition for certiorari, the Court of Appeals stated that petitioner was mainly accusing the Philippine
Overseas Employment Administration (POEA) of grave abuse of discretion when it ordered petitioner to pay, in advance,
the costs for the repatriation of the remains of the deceased Manny dela Rosa Razon.
The Court of Appeals ruled that the POEA did not commit any grave abuse of discretion as its directives to petitioner were
issued pursuant to existing laws and regulations.4 It likewise held that a petition for certiorari, which was the remedy availed
of by petitioner, is not the proper remedy as the same is only available when "there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law."5 Section 62 of the Omnibus Rules and Regulations Implementing the
Migrant Workers and Overseas Filipinos Act of 1995 or Republic Act 8042 ("Omnibus Rules") states that "the Labor Arbiters
of NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages, subject to the rules and procedures of the NLRC." There is, therefore, an
adequate remedy available to petitioner.
Lastly, the Court of Appeals declared that it could not strike down as unconstitutional Sections 52, 53, 54, and 55 of the
Omnibus Rules as the unconstitutionality of a statute or rules may not be passed upon unless the issue is directly raised in
an appropriate proceeding.6
In the present recourse, petitioner submits the following issues for our consideration:
1. The Court of Appeals erred in the appreciation of the issue as it mistakenly considered, in dismissing the petition
before it, that petitioner is contesting the compliance and conformity of the POEA directives with Sections 52, 53,
54, and 55 of the Omnibus Rules and Regulations implementing in particular Section 15 of RA 8042;

2. The Court of Appeals, in dismissing the petition, again erred in ruling that constitutional questions cannot be
passed upon and adjudged in a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure;
3. The Court of Appeals erred in not holding that, under the facts of the case that gave rise to the petition before it,
the same sections of the said rules and regulations are illegal, invalid and/or violative of the right of petitioner to due
process of law and, therefore, the POEA directives issued pursuant thereto constitute acts committed without, or in
excess of, jurisdiction and/or in grave abuse of discretion.7
In Our Resolution of 20 November 2002, we gave due course to the present petition and directed the parties to submit their
respective memoranda.8 On 28 August 2006, we resolved to dispense with the memorandum of the estate/heirs of deceased
Manny dela Rosa Razon.
At the center of this petition are the following provisions of the omnibus rules:
Section 52. Primary Responsibility for Repatriation. The repatriation of the worker, or his/her remains, and the
transport of his/her personal effects shall be the primary responsibility of the principal or agency which recruited or
deployed him/her abroad. All costs attendant thereto shall be borne by the principal or the agency concerned.
Section 53. Repatriation of Workers. The primary responsibility to repatriate entails the obligation on the part of
principal or agency to advance the cost of plane fare and to immediately repatriate the worker should the need for
it arise, without a prior determination of the cause of the termination of the worker's employment. However, after
the worker has returned to the country, the principal or agency may recover the cost of repatriation from the worker
if the termination of employment was due solely to his/her fault.
Every contract for overseas employment shall provide for the primary responsibility of agency to advance the cost
of plane fare, and the obligation of the worker to refund the cost thereof in case his/her fault is determined by the
Labor Arbiter.
Section 54. Repatriation Procedure. When a need for repatriation arises and the foreign employer fails to provide
for it cost, the responsible personnel at site shall simultaneously notify OWWA and the POEA of such need. The
POEA shall notify the agency concerned of the need for repatriation. The agency shall provide the plane ticket or
the prepaid ticket advice (PTA) to the Filipinos Resource Center or to the appropriate Philippine Embassy; and
notify POEA of such compliance. The POEA shall inform OWWA of the action of the agency.
Section 55. Action on Non-Compliance. If the employment agency fails to provide the ticket or PTA within 48
hours from receipt of the notice, the POEA shall suspend the license of the agency or impose such sanctions as it
may deem necessary. Upon notice from the POEA, OWWA shall advance the costs of repatriation with recourse to
the agency or principal. The administrative sanction shall not be lifted until the agency reimburses the OWWA of
the cost of repatriation with legal interest.
Said provisions, on the other hand, are supposed to implement Section 15 of Republic Act No. 80429 which provides:
SEC. 15. Repatriation of Workers; Emergency Repatriation Fund. The repatriation of the worker and the transport
of his personal belongings shall be the primary responsibility of the agency which, recruited or deployed the worker
overseas. All costs attendant to repatriation shall be borne by or charged to the agency concerned and/or its
principal. Likewise, the repatriation of remains and transport of the personal belongings of a deceased worker and
all costs attendant thereto shall be borne by the principal and/or the local agency. However, in cases where the
termination of employment is due solely to the fault of the worker, the principal/employer or agency shall not in any
manner be responsible for the repatriation of the former and/or his belongings.
Petitioner contends that the Court of Appeals misappreciated the issue it presented in its petition for certiorari when, instead
of resolving whether Sections 52, 53, 54, and 55 of the Omnibus Rules are illegal and violative of due process, it merely
confined itself to the question of whether or not the POEA committed grave abuse of discretion in issuing its directives of
22 September 2000 and 27 September 2000.
Petitioner also contends that, contrary to the finding of the Court of Appeals, a special civil action for certiorari is the
appropriate remedy to raise constitutional issues.

Also, petitioner insists that the subject portions of the omnibus rules are invalid on the ground that Section 15 of Republic
Act No. 8042 does not impose on a recruitment agency the primary responsibility for the repatriation of a deceased Overseas
Filipino Worker (OFW), while Section 52 of the Omnibus Rules unduly imposes such burden on a placement agency.
Moreover, petitioner argues that the word "likewise" at the start of the third sentence of Section 15 of Republic Act No. 8042
is used merely as a connective word indicating the similarity between a recruitment agency's financial obligation in the
repatriation of living and a deceased OFW. It does not, however, necessarily make a placement agency primarily
responsible for the repatriation of a deceased OFW unlike in the case of an OFW who is alive.
As for Section 53 of the Omnibus Rules, petitioner submits that the same is invalid as Section 15 of Republic Act No. 8042
clearly states that a placement agency shall not in any manner be responsible for the repatriation of the deceased OFW
and his or her belongings should the termination of the OFW's employment be due to his or her fault. However, as Section
53 of the Omnibus Rules stipulates that a placement agency or principal shall bear the primary responsibility of repatriating
an OFW and of advancing the payment for his or her plane fare, the omibus rules, as far as this section is concerned, is an
invalid exercise of legislative power by an administrative agency.
In addition, petitioner claims Section 53 of the Omnibus Rules violates the due process clause of the constitution as it
deprives the deploying agency of the right to prior notice and hearing through which it can prove that it should not bear the
burden of repatriating an OFW.
Finally, petitioner points out that it should be the Overseas Workers Welfare Administration which should advance the costs
of repatriation of the deceased Razon with the resources coming out of the emergency repatriation fund of said agency.
The Solicitor General for its part counters that Sections 52, 53, 54, and 55 of the Omnibus Rules are valid quasi-legislative
acts of respondents Department of Foreign Affairs and Department of Labor and Employment.10 Because of this, the
requirements of prior notice and hearing are not essential. Besides, there are cases where even in the exercise of quasijudicial power, administrative agencies are allowed, sans prior notice and hearing, to effectuate measures affecting private
property, such as:
1) [F]or the summary abatement of nuisance per se which affects the immediate safety of persons and property, or
2) in summary proceedings of distraint and levy upon the property of delinquent taxpayers in the collection of internal
revenue taxes, fees or charges or any increment thereto, or 3) in the preventive suspension of a public officer
pending investigation. x x x.11
The Solicitor General also adds that since petitioner is engaged in the recruitment of Filipino workers for work abroad, the
nature of its business calls for the exercise of the state's police power in order to safeguard the rights and welfare of the
Filipino laborers. One such measure is the primary responsibility imposed upon placement agencies with regard to the
repatriation of an OFW or of his remains.
The Solicitor General also argues that the wording of Section 15 of Republic Act No. 8042 leaves no doubt that a recruitment
agency shall bear the primary responsibility for the repatriation of an OFW whether the latter is dead or alive.
Lastly, the Solicitor General insists that actions assailing the validity of implementing rules and regulations are within the
original jurisdiction of the regional trial courts.
We shall first address the procedural question involved in the present petition.
There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or
regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of Appeals or to this
Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules
promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial review or the power to declare a
law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the
courts, including the regional trial courts.12
Section 1, Rule 65 of the 1997 Rules of Civil Procedure states:
SECTION 1. Petition for Certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a

person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof,
copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum
shopping as provided in the third paragraph of Section 3, Rule 46.
From this, it is clear that in order for a petition for certiorari to prosper, the following requisites must be present: (1) the writ
is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or
officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.
It bears emphasizing that administrative bodies are vested with two basic powers, the quasi-legislative and the quasijudicial.13 In Abella, Jr. v. Civil Service Commission,14 we discussed the nature of these powers to be
In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons before it, in
accordance with the standards laid down by the law. The determination of facts and the applicable law, as basis for
official action and the exercise of judicial discretion, are essential for the performance of this function. On these
considerations, it is elementary that due process requirements, as enumerated in Ang Tibay, must be observed.
These requirements include prior notice and hearing.
On the other hand, quasi-legislative power is exercised by administrative agencies through the promulgation of
rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers
flowing from the separation of the great branches of the government. Prior notice to and hearing of every affected
party, as elements of due process, are not required since there is no determination of past events or facts that have
to be established or ascertained. As a general rule, prior notice and hearing are not essential to the validity of rules
or regulations promulgated to govern future conduct.
In this case, petitioner assails certain provisions of the Omnibus Rules. However, these rules were clearly promulgated by
respondents Department of Foreign Affairs and Department of Labor and Employment in the exercise of their quasilegislative powers or the authority to promulgate rules and regulations. Because of this, petitioner was, thus, mistaken in
availing himself of the remedy of an original action for certiorari as obviously, only judicial or quasi-judicial acts are proper
subjects thereof. If only for these, the petition deserves outright dismissal. Be that as it may, we shall proceed to resolve
the substantive issues raised in this petition for review in order to finally remove the doubt over the validity of Sections 52,
53, 54, and 55 of the Omnibus Rules.
It is now well-settled that delegation of legislative power to various specialized administrative agencies is allowed in the face
of increasing complexity of modern life. Given the volume and variety of interactions involving the members of today's
society, it is doubtful if the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the
need to delegate to administrative bodies, as the principal agencies tasked to execute laws with respect to their specialized
fields, the authority to promulgate rules and regulations to implement a given statute and effectuate its policies.15 All that is
required for the valid exercise of this power of subordinate legislation is that the regulation must be germane to the objects
and purposes of the law; and that the regulation be not in contradiction to, but in conformity with, the standards prescribed
by the law.16 Under the first test or the so-called completeness test, the law must be complete in all its terms and conditions
when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.17 The
second test or the sufficient standard test, mandates that there should be adequate guidelines or limitations in the law to
determine the boundaries of the delegate's authority and prevent the delegation from running riot.18
We resolve that the questioned provisions of the Omnibus Rules meet these requirements.
Basically, petitioner is impugning the subject provisions of the Omnibus Rules for allegedly expanding the scope of Section
15 of Republic Act No. 8042 by: first, imposing upon it the primary obligation to repatriate the remains of the deceased
Razon including the duty to advance the cost of the plane fare for the transport of Razon's remains; and second, by ordering
it to do so without prior determination of the existence of employer-employee relationship between itself and Razon.
Petitioner's argument that Section 15 does not provide that it shall be primarily responsible for the repatriation of a deceased
OFW is specious and plain nitpicking. While Republic Act No. 8042 does not expressly state that petitioner shall be primarily
obligated to transport back here to the Philippines the remains of the deceased Razon, nevertheless, such duty is imposed
upon him as the statute clearly dictates that "the repatriation of remains and transport of the personal belongings of a

deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency." The mandatory
nature of said obligation is characterized by the legislature's use of the word "shall." That the concerned government
agencies opted to demand the performance of said responsibility solely upon petitioner does not make said directives invalid
as the law plainly obliges a local placement agency such as herein petitioner to bear the burden of repatriating the remains
of a deceased OFW with or without recourse to the principal abroad. In this regard, we see no reason to invalidate Section
52 of the omnibus rules as Republic Act No. 8042 itself permits the situation wherein a local recruitment agency can be held
exclusively responsible for the repatriation of a deceased OFW.
Nor do we see any reason to stamp Section 53 of the Omnibus Rules as invalid for allegedly contravening Section 15 of
the law which states that a placement agency shall not be responsible for a worker's repatriation should the termination of
the employer-employee relationship be due to the fault of the OFW. To our mind, the statute merely states the general
principle that in case the severance of the employment was because of the OFW's own undoing, it is only fair that he or she
should shoulder the costs of his or her homecoming. Section 15 of Republic Act No. 8042, however, certainly does not
preclude a placement agency from establishing the circumstances surrounding an OFW's dismissal from service in an
appropriate proceeding. As such determination would most likely take some time, it is only proper that an OFW be brought
back here in our country at the soonest possible time lest he remains stranded in a foreign land during the whole time that
recruitment agency contests its liability for repatriation. As aptly pointed out by the Solicitor General
Such a situation is unacceptable.
24. This is the same reason why repatriation is made by law an obligation of the agency and/or its principal without
the need of first determining the cause of the termination of the worker's employment. Repatriation is in effect an
unconditional responsibility of the agency and/or its principal that cannot be delayed by an investigation of why the
worker was terminated from employment. To be left stranded in a foreign land without the financial means to return
home and being at the mercy of unscrupulous individuals is a violation of the OFW's dignity and his human rights.
These are the same rights R.A. No. 8042 seeks to protect.19
As for the sufficiency of standard test, this Court had, in the past, accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and welfare," and "simplicity, economy and welfare."20
In this case, we hold that the legislature's pronouncements that Republic Act No. 8042 was enacted with the thought of
upholding the dignity of the Filipinos may they be here or abroad and that the State shall at all times afford full protection to
labor, both here and abroad, meet the requirement and provide enough guidance for the formulation of the omnibus rules.
WHEREFORE, the Petition for Review is DENIED. The Court of Appeals' Decision dated 4 October 2001 and Resolution
dated 18 February 2002 are hereby AFFIRMED. With costs.
SO ORDERED.
Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez, Callejo, Sr., J.J., concur.

G.R. No. L-50734-37

February 20, 1981

WALLEM PHILIPPINES SHIPPING, INC., petitioner,

vs.
THE HON. MINISTER OF LABOR, in his capacity as Chairman of the National Seamen Board Proper, JAIME
CAUNCA, ANTONIO CABRERA, EFREN GARCIA, JOSE OJEDA and RODOLFO PAGWAGAN, respondents.
DE CASTRO, J.:
Petition for certiorari with preliminary injunction with prayer that the Orders dated December 19, 1977 and April 3, 1979 of
the National Seamen Board (NSB) be declared null and void. Private respondents were hired by petitioner sometime in May
1975 to work as seamen for a period of ten months on board the M/V Woermann Sanaga, a Dutch vessel owned and
operated by petitioner's European principals. While their employment contracts were still in force, private respondents were
dismissed by their employer, petitioner herein, and were discharged from the ship on charges that they instigated the
International Transport Federation (ITF) to demand the application of worldwide ITF seamen's rates to their crew.
Private respondents were repatriated to the Philippines on October 27, 1975 and upon their arrival in Manila, they instituted
a complaint against petitioner for illegal dismissal and recovery of wages and other benefits corresponding to the five
months' unexpired period of their shipboard employment contract.
In support of their complaint, private respondents submitted a Joint Affidavit 1 stating the circumstances surrounding their
employment and subsequent repatriation to the Philippines, material averments of which are herein below reproduced:
JOINTAFFIDAVIT
xxx xxx xxx
5. That aside from our basic monthly salary we are entitled to two (2) months vacation leave, daily
subsistence allowance of US$8.14 each, daily food allowance of US$2.50. as well as overtime pay which
we failed to receive because our Shipboard Employment Contract was illegally terminated;
6. That while we were in Rotterdam, on or about July 9, 1975, representative of the ITF boarded our vessel
and talked with the Ship's Captain;
7. That the following day, the representatives of the ITF returned and was followed by Mr. M.S.K. Ogle who
is the Company's Administrative Manager, again went to see the Captain;
8. That at around 7:00 in the evening all the crew members were called in the Mess Hall where the ITF
representatives informed us that they have just entered into a "Special Agreement" with the Wallem
Shipping Management, Ltd., represented by Mr. M.S.K. Ogle, Administrative Manager, wherein new salary
rates was agreed upon and that we were going to be paid our salary differentials in view of the new rates;
9. That in the same meeting, Mr. M.S.K. Ogle also spoke where he told that a Special Agreement has been
signed and that we will be receiving new pay rate and enjoined us to work hard and be good boys;
10. That the same evening we received our salary differentials based on the new rates negotiated for us by
the ITF.
11. That while we were in the Port Dubai, Saudi Arabia, we were not receiving our pay, since the Ship's
Captain refused to implement the world-wide rates and insisted on paying us the Far East Rate;
12. That the Port Dubai is one that is within the Worldwide rates sphere.
13. That on October 22, 1975, Mr. Greg Nacional Operation Manager of respondent corporation, arrived in
Dubai Saudi Arabia and boarded our ship;
14. That on October 23, 1975, Mr. Nacional called all the crew members, including us to a meeting at the
Mess Hall and there he explained that the Company cannot accept the worldwide rate. The Special

Agreement signed by Mr. Ogle in behalf of the Company is nothing but a scrap of paper. Mr. Jaime Caunca
then asked Mr. Nacional, in view of what he was saying, whether the Company will honor the Special
Agreement and Mr. Nacional answered "Yes". That we must accept the Far East Rates which was put to a
vote. Only two voted for accepting the Far East Rates;
15. That immediately thereafter Mr. Nacional left us;
16. That same evening, Mr. Nacional returned and threatened that he has received a cable from the Home
Office that if we do not accept the Far East Rate, our services will be terminated and there will be a change
in crew;
17. That when Mr. Nacional left, we talked amongst ourselves and decided to accept the Far East Rates;
18. That in the meeting that evening because of the threat we informed Mr. Nacional we were accepting
the Far East Rate and he made us sign a document to that effect;
19. That we the complainants with the exception of Leopoldo Mamaril and Efren Garcia, were not able to
sign as we were at the time on work schedules, and Mr. Nacional did not bother anymore if we signed or
not;
20. That after the meeting Mr. Nacional cabled the Home Office, informing them that we the complainants
with the exception of Messrs. Mamaril and Garcia were not accepting the Far East Rates;
21. That in the meeting of October 25, 1975, Mr. Nacional signed a document whereby he promised to give
no priority of first preference in "boarding a vessel and that we are not blacklisted";
22. That in spite of our having accepted the Far East Rate, our services were terminated and advised us
that there was a change in crew;
23. That on October 27, 1975, which was our scheduled flight home, nobody attended us, not even our
clearance for our group travel and consequently we were not able to board the plane, forcing us to sleep
on the floor at the airport in the evening of October 27, 1975;
24. That the following day we went back to the hotel in Dubai which was a two hours ride from the airport,
where we were to await another flight for home via Air France;
25. That we were finally able to leave for home on November 2, 1975 arriving here on the 3rd of November;
26. That we paid for all excess baggages;
27. That Mr. Nacional left us stranded, since he went ahead on October 27, 1975;
28. That immediately upon arriving in Manila, we went to respondent Company and saw Mr. Nacional, who
informed us that we were not blacklisted, however, Mr. Mckenzie, Administrative Manager did inform us
that we were all blacklisted;
29. That we were asking from the respondent Company our leave pay, which they refused to give, if we did
not agree to a US$100.00 deduction;
30. That with the exception of Messrs. Jaime Caunca Amado Manansala and Antonio Cabrera, we received
our leave pay with the US$100.00 deduction;
31. That in view of the written promise of Mr. Nacional in Dubai last October 23, 1975 to give us priority and
preference in boarding a vessel and that we were not blacklisted we have on several occasions approached
him regarding his promise, which up to the present he has refused to honor.
xxx xxx xxx

Answering the complaint, petitioner countered that when the vessel was in London, private respondents together with the
other crew insisted on worldwide ITF rate as per special agreement; that said employees threatened the ship authorities
that unless they agreed to the increased wages the vessel would not be able to leave port or would have been picketed
and/or boycotted and declared a hot ship by the ITF; that the Master of the ship was left with no alternative but to agree;
that upon the vessel's arrival at the Asian port of Dubai on October 22, 1975, a representative of petitioner went on board
the ship and requested the crew together with private respondents to desist from insisting worldwide ITF rate and instead
accept the Far East rate; that said respondents refused to accept Far East ITF rates while the rest of the Filipino crew
members accepted the Far East rates; that private respondents were replaced at the expense of petitioner and it was prayed
that respondents be required to comply with their obligations under the contract by requiring them to pay their repatriation
expenses and all other incidental expenses incurred by the master and crew of the vessel.
After the hearing on the merits, the hearing Officer of the Secretariat rendered a decision 2 on March 14, 1977 finding private
respondents to have violated their contract of employment when they accepted salary rates different from their contract
verified and approved by the National Seamen Board. As to the issue raised by private respondents that the original contract
has been novated, it was held that:
xxx xxx xxx
For novation to be a valid defense, it is a legal requirement that all parties to the contract should give their
consent. In the instant case only the complainants and respondents gave their consent. The National
Seamen Board had no participation in the alleged novation of the previously approved employment
contract. It would have been different if the consent of the National Seamen Board was first secured before
the alleged novation of the approved contract was undertaken, hence, the defense of novation is not in
order.
xxx xxx xxx
The Hearing Officer likewise rules that petitioner violated the contract when its representative signed the Special Agreement
and he signed the same at his own risk and must bear the consequence of such act, and since both parties are in paridelicto,
complaint and counterclaim were dismissed for lack of merit but petitioner was ordered to pay respondents Caunca and
Cabrera their respective leave pay for the period that they have served M/V Woermann Sanaga plus attorney's fees.
Private respondents filed a motion for reconsideration with the Board which modified the decision of the Secretariat in an
Order 3 of December 19, 1977 and ruled that petitioner is liable for breach of contract when it ordered the dismissal of private
respondents and their subsequent repatriation before the expiration of their respective employment contracts. The Chairman
of the Board stressed that "where the contract is for a definite period, the captain and the crew members may not be
discharged until after the contract shall have been performed" citing the case of Madrigal Shipping Co., Inc. vs. Ogilvie, et
al. (104 Phil. 748). He directed petitioner to pay private respondents the unexpired portion of their contracts and their leave
pay, less the amount they received as differentials by virtue of the special agreements entered in Rotterdam, and ten percent
of the total amounts recovered as attorney's fees.
Petitioner sought clarification and reconsideration of the said order and asked for a confrontation with private respondents
to determine the specific adjudications to be made. A series of conferences were conducted by the Board. It was claimed
by petitioner that it did not have in its possession the records necessary to determine the exact amount of the judgment
since the records were in the sole custody of the captain of the ship and demanded that private respondents produce the
needed records. On this score, counsel for respondents manifested that to require the master of the ship to produce the
records would result to undue delay in the disposition of the case to the detriment of his clients, some of whom are still
unemployed.
Under the circumstances, the Board was left with no alternative but to issue an Order dated April 3, 1979 4 fixing the amount
due private respondents at their three (3) months' salary equivalent without qualifications or deduction. Hence,the instant
petition before Us alleging grave abuse of discretion on the part of the respondent official as Chairman of the Board, in
issuing said order which allegedly nullified the findings of the Secretariat and premised adjudication on imaginary conditions
which were never taken up with full evidence in the course of hearing on the merits.
The whole controversy is centered around the liability of petitioner when it ordered the dismissal of herein private
respondents before the expiration of their respective employment contracts.
In its Order of December 19, 1977 5 the Board, thru its Chairman, Minister Blas F. Ople, held that there is no showing that
the seamen conspired with the ITF in coercing the ship authorities to grant salary increases, and the Special Agreement

was signed only by petitioner and the ITF without any participation from the respondents who, accordingly, may not be
charged as they were, by the Secretariat, with violation of their employment contract. The Board likewise stressed that the
crew members may not be discharged until after the expiration of the contract which is for a definite period, and where the
crew members are discharged without just cause before the contract shall have been performed, they shall be entitled to
collect from the owner or agent of the vessel their unpaid salaries for the period they were engaged to render the services,
applying the case of Madrigal Shipping Co., Inc. vs. Jesus Ogilivie et al. 6
The findings and conclusion of the Board should be sustained. As already intimated above, there is no logic in the statement
made by the Secretariat's Hearing Officer that the private respondents are liable for breach of their employment contracts
for accepting salaries higher than their contracted rates. Said respondents are not signatories to the Special Agreement,
nor was there any showing that they instigated the execution thereof. Respondents should not be blamed for accepting
higher salaries since it is but human for them to grab every opportunity which would improve their working conditions and
earning capacity. It is a basic right of all workingmen to seek greater benefits not only for themselves but for their families
as well, and this can be achieved through collective bargaining or with the assistance of trade unions. The Constitution itself
guarantees the promotion of social welfare and protection to labor. It is therefore the Hearing Officer that gravely erred in
disallowing the payment of the unexpired portion of the seamen's respective contracts of employment.
Petitioner claims that the dismissal of private respondents was justified because the latter threatened the ship authorities in
acceeding to their demands, and this constitutes serious misconduct as contemplated by the Labor Code. This contention
is not well-taken. The records fail to establish clearly the commission of any threat. But even if there had been such a threat,
respondents' behavior should not be censured because it is but natural for them to employ some means of pressing their
demands for petitioner, who refused to abide with the terms of the Special Agreement, to honor and respect the same. They
were only acting in the exercise of their rights, and to deprive them of their freedom of expression is contrary to law and
public policy. There is no serious misconduct to speak of in the case at bar which would justify respondents' dismissal just
because of their firmness in their demand for the fulfillment by petitioner of its obligation it entered into without any coercion,
specially on the part of private respondents.
On the other hand, it is petitioner who is guilty of breach of contract when they dismissed the respondents without just cause
and prior to the expiration of the employment contracts. As the records clearly show, petitioner voluntarily entered into the
Special Agreement with ITF and by virtue thereof the crew men were actually given their salary differentials in view of the
new rates. It cannot be said that it was because of respondents' fault that petitioner made a sudden turn-about and refused
to honor the special agreement.
In brief, We declare petitioner guilty of breach of contract and should therefore be made to comply with the directives
contained in the disputed Orders of December 19, 1977 and April 3, 1979.
WHEREFORE, premises considered, the decision dated March 14, 1977 of the Hearing Officer is SET ASIDE and the
Orders dated December 19, 1977 and April 3, 1979 of the National Seamen Board are AFFIRMED in toto. This decision is
immediately executory. Without costs.
SO ORDERED.
Makasiar, Fernandez, Guerrero and Melencio-Herrera, JJ., concur.
Teehankee (Chairman), J., concur in the result.

G.R. No. 152214

September 19, 2006

EQUI-ASIA PLACEMENT, INC., petitioner,

vs.
DEPARTMENT OF FOREIGN AFFAIRS (DFA) represented by the HON. DOMINGO L. SIAZON, JR., SECRETARY,
DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE), represented by HON. BIENVENIDO LAGUESMA,
respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari of the Decision dated 4 October 20011 and Resolution dated 18 February 2002 of
the Court of Appeals in CA-G.R. SP No. 61904. The Decision denied petitioner's petition for certiorari while the Resolution
denied its Motion for Reconsideration.
The Court of Appeals summarized the facts of this case in this wise:
On September 16, 2000, Manny dela Rosa Razon, a native of Lemery, Batangas and an overseas Filipino worker,
died of acute cardiac arrest while asleep at the dormitory of the Samsong Textile Processing Factory in South
Korea. Informed thereof, the Philippine Overseas Labor Office (POLO) at South Korea immediately relayed the
incident to the Philippine Embassy in South Korea. Forthwith, the [Labor] Attach of the Philippine Embassy
dispatched a letter to Eleuterio N. Gardiner, administrator of the Overseas Workers Welfare Administration
(OWWA). The letter reads:
"VERY URGENT, POLO has recently received a report that OFW Manny dela Rosa RAZON, an
undocumented worker, died last Saturday, 16 September, from an apparent pancreatic attack or
'bangungot.'
According to the verbal reports of Moises and Ronald Recarde, Manny's co-workers, he was found already
lifeless inside their quarters at around 11:00 in the morning of the above date. They rushed him to Uri
Hospital where the Doctor declared him dead on arrival.
Per information gathered, the deceased is single, 29 years old, from Bukal, Lemery, Batangas. His next-ofkins are Mrs. Rowena Razon (Auntie) and Mr. Razon (Uncle) with telephone number (043)411-2308.
POLO is awaiting signed statements from the aforementioned workers who promised to send it by fax this
afternoon.
We are also coordinating with the deceased's employer for documentation requirements and financial
assistance for the repatriation of the remains.
We will highly appreciate if Home Office could advise the next-of-kins of the urgent need to issue a Special
Power of Attorney (SPA) to facilitate the repatriation requirements of the subject.
In anticipation of the next-of-kins' likely move to seek financial assistance from OWWA for the repatriation
of their loved [one], please be advised in advance that we will need about US$4,000.00 to repatriate the
cadaver (to include hospital and morgue costs) to Manila. xxx"
In turn, the OWWA, through Atty. Cesar L. Chavez, indorsed the matter, for appropriate action, to Director R. Casco
of the Welfare Employment Office of the Philippine Overseas Employment Administration (WEO-POEA).
Upon verification by the WEO-POEA on its data base, it was discovered that Manny Razon was recruited and
deployed by petitioner Equi-Asia Placement, Inc., and was sent to South Korea on April 3, 2000 to work-train at
Yeongjin Machinery, Inc. Thereupon, POEA addressed the herein first assailed telegram-directive dated September
22, 2000 to the President/General Manager of the petitioner. We quote the telegram:
"PLEASE PROVIDE PTA [Prepaid Ticket Advice] FOR THE REPATRIATION OF REMAINS AND
BELONGINGS OF OFW MANNY DELA ROSA RAZON AS PER REQUEST OF PHILIPPINE EMBASSY,

KOREA, YOU CAN COORDINATE WITH YOUR FOREIGN EMPLOYER AND TO WAD/OWWA (MLA) AS
REGARDS TO THIS MATTER. YOU ARE GIVEN TWO (2) DAYS FROM RECEIPT HEREOF WITHIN
WHICH TO PROVIDE SAID TICKET AND ASSISTANCE, KINDLY SUBMIT YOUR REPORT TO
ASSISTANCE AND WELFARE DIVISION (AWD), 2/F POEA, FAILURE TO DO SO WILL CONSTRAIN US
TO IMPOSE APPROPRIATE SANCTION UNDER OUR RULES"
Responding thereto, petitioner, thru its President Daniel Morga, Jr., faxed on September 26, 2000 the following
message to the Assistance and Welfare Division of the POEA:
"In connection with your telegram, dated 09/22/2000, requiring us to report the circumstances surrounding
the death of OFW MANNY DELA ROSA RAZON in Korea and requesting us to issue a PTA, etc., for the
repatriation of the remains of said OFW, this is to report to your good office the following:
1. The deceased was deployed by our agency on April 3, 2000 to Yeongjin Machine Company in South
Korea;
2. He violated his employment/training/dispatching contracts on June 25, 2000 by unlawfully
escaping/running away (TNT) from his company assignment without prior KFSMB authorization and
working/staying in unknown company/place;
3. He allegedly died of 'bangungot' thereafter;
In view thereof, we cannot heed your requests as embodied in your telegram. However, his relatives can
avail of the benefits provided for by OWWA in cases involving undocumented/illegal Filipino workers
abroad.
Trusting for your kind understanding"
On the same date September 26, 2000 Director Ricardo R. Casco of the WEO-POEA sent to the petitioner the
herein second assailed letter-directive, which pertinently reads:
"We have received a copy of your fax message dated 26 September 2000 as regards to your response to
our request for PTA for aforesaid deceased OFW. Nevertheless, may we remind you that pursuant to
Sections 52, 53, 54 and 55 of the Implementing Rules Governing RA 8042, otherwise known as the Migrant
Workers and Overseas Filipino Act of 1995, the repatriation of OFW, his/her remains and transport of his
personal effects is the primary responsibility of the principal or agency and to immediately advance the cost
of plane fare without prior determination of the cause of worker's repatriation. The Rules further provide for
the procedure to be followed in cases when the foreign employer/agency fails to provide for the cost of the
repatriation, compliance of which is punishable by suspension of the license of the agency or such sanction
as the Administration shall deem proper. Hence, you are required to provide the PTA for the deceased
OFW in compliance with the requirement in accordance with R.A. 8042. You are given forty-eight (48) hours
upon receipt hereof within which to provide said ticket. Failure in this regard will constrain us to impose the
appropriate sanction under our rules."
On September 27, 2000, petitioner wrote back Director Ricardo R. Casco, thus:
"In connection with your fax letter dated September 26, 2000, re: the repatriation of the remains of the
deceased, ex-trainee (OFW) MANNY DELA ROSA RAZON, please be informed that the provisions of
Section 53 as well as, and in relation to, Section 55 of the Omnibus Rules and Regulations Implementing
the Migrant Workers and Overseas Filipinos Act of 1995 on the matters covering the following:
1. The responsibility of the agency to advance the cost of plane fare without prior determination of
the cause of the deceased worker's termination.
2. The recovery of the same costs from the estate of the dead worker before the NLRC.
3. The action to be imposed by POEA for non-compliance therewith within 48 hours are violative of
due process and/or the principle on due delegation of power.

This is so because Sec. 15 of R.A. 8042 clearly contemplates prior notice and hearing before responsibility
thereunder could be established against the agency that sets up the defense of sole fault in avoidance of
said responsibility -. Besides, the sections in question unduly grant the powers to require advance payment
of the plane fare, to impose the corresponding penalty of suspension in case of non-compliance therewith,
within 48 hours and to recover said advance payment from the dead worker's estate upon the return of his
remains to the country before the NLRC, when the law itself does not expressly provide for the grant of
such powers.
x x x x x x x x x.
Please provide us immediately with the death certificate/post mortem report/police report pertinent to above
as proof of death and cause thereof."
Nonetheless, and apprehensive of the adverse repercussions which may ensue on account of its non-compliance
with the directive, petitioner, on September 29, 2000, advanced under protest the costs for the repatriation of the
remains of the late Manny dela Rosa Razon.
Thereafter, petitioner went to this Court via the instant petition for certiorari, posing, for Our consideration, the sole
issue of
"WHETHER OR NOT SECTIONS 52, 53, 54 AND 55 OF THE OMNIBUS RULES AND REGULATIONS
IMPLEMENTING THE MIGRANT WORKERS AND OVERSEAS FILIPINOS ACT OF 1995 (R.A. 8042),
ISSUED BY DFA AND POEA, WHICH POEA SUMMARILY ORDERED THE HEREIN PETITIONER TO
COMPLY VIZ-A-VIZ THE PAYMENT IN ADVANCE OF THE EXPENSES FOR THE REPATRIATION OF
THE REMAINS OF A DECEASED WORKER-TRAINEE WHO, AT THE TIME OF HIS DEATH, HAS NO
EXISTING EMPLOYMENT (DISPATCHING) CONTRACT WITH EITHER SAID PETITIONER OR HIS
FOREIGN PRINCIPAL AND NO VALID VISA OR IS NOT WORKING WITH THE FOREIGN PRINCIPAL
TO WHICH PETITIONER DEPLOYED HIM, IS ILLEGAL AND/OR VIOLATIVE OF DUE PROCESS SUCH
THAT POEA ACTED WITHOUT [OR IN] EXCESS OF ITS JURISDICTION AND/OR IN GRAVE ABUSE
OF DISCRETION IN ISSUING SAID ORDER TO PAY SAID EXPENSES." 2
On 4 October 2001, the Court of Appeals rendered the Decision which is now the subject of the present petition. The
dispositive portion of the Court of Appeals' Decision states:
WHEREFORE, for lack of merit, the instant petition is DENIED and is accordingly DISMISSED.3
In dismissing the petition for certiorari, the Court of Appeals stated that petitioner was mainly accusing the Philippine
Overseas Employment Administration (POEA) of grave abuse of discretion when it ordered petitioner to pay, in advance,
the costs for the repatriation of the remains of the deceased Manny dela Rosa Razon.
The Court of Appeals ruled that the POEA did not commit any grave abuse of discretion as its directives to petitioner were
issued pursuant to existing laws and regulations.4 It likewise held that a petition for certiorari, which was the remedy availed
of by petitioner, is not the proper remedy as the same is only available when "there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law."5 Section 62 of the Omnibus Rules and Regulations Implementing the
Migrant Workers and Overseas Filipinos Act of 1995 or Republic Act 8042 ("Omnibus Rules") states that "the Labor Arbiters
of NLRC shall have the original and exclusive jurisdiction to hear and decide all claims arising out of employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages, subject to the rules and procedures of the NLRC." There is, therefore, an
adequate remedy available to petitioner.
Lastly, the Court of Appeals declared that it could not strike down as unconstitutional Sections 52, 53, 54, and 55 of the
Omnibus Rules as the unconstitutionality of a statute or rules may not be passed upon unless the issue is directly raised in
an appropriate proceeding.6
In the present recourse, petitioner submits the following issues for our consideration:
1. The Court of Appeals erred in the appreciation of the issue as it mistakenly considered, in dismissing the petition
before it, that petitioner is contesting the compliance and conformity of the POEA directives with Sections 52, 53,
54, and 55 of the Omnibus Rules and Regulations implementing in particular Section 15 of RA 8042;

2. The Court of Appeals, in dismissing the petition, again erred in ruling that constitutional questions cannot be
passed upon and adjudged in a special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure;
3. The Court of Appeals erred in not holding that, under the facts of the case that gave rise to the petition before it,
the same sections of the said rules and regulations are illegal, invalid and/or violative of the right of petitioner to due
process of law and, therefore, the POEA directives issued pursuant thereto constitute acts committed without, or in
excess of, jurisdiction and/or in grave abuse of discretion.7
In Our Resolution of 20 November 2002, we gave due course to the present petition and directed the parties to submit their
respective memoranda.8 On 28 August 2006, we resolved to dispense with the memorandum of the estate/heirs of deceased
Manny dela Rosa Razon.
At the center of this petition are the following provisions of the omnibus rules:
Section 52. Primary Responsibility for Repatriation. The repatriation of the worker, or his/her remains, and the
transport of his/her personal effects shall be the primary responsibility of the principal or agency which recruited or
deployed him/her abroad. All costs attendant thereto shall be borne by the principal or the agency concerned.
Section 53. Repatriation of Workers. The primary responsibility to repatriate entails the obligation on the part of
principal or agency to advance the cost of plane fare and to immediately repatriate the worker should the need for
it arise, without a prior determination of the cause of the termination of the worker's employment. However, after
the worker has returned to the country, the principal or agency may recover the cost of repatriation from the worker
if the termination of employment was due solely to his/her fault.
Every contract for overseas employment shall provide for the primary responsibility of agency to advance the cost
of plane fare, and the obligation of the worker to refund the cost thereof in case his/her fault is determined by the
Labor Arbiter.
Section 54. Repatriation Procedure. When a need for repatriation arises and the foreign employer fails to provide
for it cost, the responsible personnel at site shall simultaneously notify OWWA and the POEA of such need. The
POEA shall notify the agency concerned of the need for repatriation. The agency shall provide the plane ticket or
the prepaid ticket advice (PTA) to the Filipinos Resource Center or to the appropriate Philippine Embassy; and
notify POEA of such compliance. The POEA shall inform OWWA of the action of the agency.
Section 55. Action on Non-Compliance. If the employment agency fails to provide the ticket or PTA within 48
hours from receipt of the notice, the POEA shall suspend the license of the agency or impose such sanctions as it
may deem necessary. Upon notice from the POEA, OWWA shall advance the costs of repatriation with recourse to
the agency or principal. The administrative sanction shall not be lifted until the agency reimburses the OWWA of
the cost of repatriation with legal interest.
Said provisions, on the other hand, are supposed to implement Section 15 of Republic Act No. 80429 which provides:
SEC. 15. Repatriation of Workers; Emergency Repatriation Fund. The repatriation of the worker and the transport
of his personal belongings shall be the primary responsibility of the agency which, recruited or deployed the worker
overseas. All costs attendant to repatriation shall be borne by or charged to the agency concerned and/or its
principal. Likewise, the repatriation of remains and transport of the personal belongings of a deceased worker and
all costs attendant thereto shall be borne by the principal and/or the local agency. However, in cases where the
termination of employment is due solely to the fault of the worker, the principal/employer or agency shall not in any
manner be responsible for the repatriation of the former and/or his belongings.
Petitioner contends that the Court of Appeals misappreciated the issue it presented in its petition for certiorari when, instead
of resolving whether Sections 52, 53, 54, and 55 of the Omnibus Rules are illegal and violative of due process, it merely
confined itself to the question of whether or not the POEA committed grave abuse of discretion in issuing its directives of
22 September 2000 and 27 September 2000.
Petitioner also contends that, contrary to the finding of the Court of Appeals, a special civil action for certiorari is the
appropriate remedy to raise constitutional issues.

Also, petitioner insists that the subject portions of the omnibus rules are invalid on the ground that Section 15 of Republic
Act No. 8042 does not impose on a recruitment agency the primary responsibility for the repatriation of a deceased Overseas
Filipino Worker (OFW), while Section 52 of the Omnibus Rules unduly imposes such burden on a placement agency.
Moreover, petitioner argues that the word "likewise" at the start of the third sentence of Section 15 of Republic Act No. 8042
is used merely as a connective word indicating the similarity between a recruitment agency's financial obligation in the
repatriation of living and a deceased OFW. It does not, however, necessarily make a placement agency primarily
responsible for the repatriation of a deceased OFW unlike in the case of an OFW who is alive.
As for Section 53 of the Omnibus Rules, petitioner submits that the same is invalid as Section 15 of Republic Act No. 8042
clearly states that a placement agency shall not in any manner be responsible for the repatriation of the deceased OFW
and his or her belongings should the termination of the OFW's employment be due to his or her fault. However, as Section
53 of the Omnibus Rules stipulates that a placement agency or principal shall bear the primary responsibility of repatriating
an OFW and of advancing the payment for his or her plane fare, the omibus rules, as far as this section is concerned, is an
invalid exercise of legislative power by an administrative agency.
In addition, petitioner claims Section 53 of the Omnibus Rules violates the due process clause of the constitution as it
deprives the deploying agency of the right to prior notice and hearing through which it can prove that it should not bear the
burden of repatriating an OFW.
Finally, petitioner points out that it should be the Overseas Workers Welfare Administration which should advance the costs
of repatriation of the deceased Razon with the resources coming out of the emergency repatriation fund of said agency.
The Solicitor General for its part counters that Sections 52, 53, 54, and 55 of the Omnibus Rules are valid quasi-legislative
acts of respondents Department of Foreign Affairs and Department of Labor and Employment.10 Because of this, the
requirements of prior notice and hearing are not essential. Besides, there are cases where even in the exercise of quasijudicial power, administrative agencies are allowed, sans prior notice and hearing, to effectuate measures affecting private
property, such as:
1) [F]or the summary abatement of nuisance per se which affects the immediate safety of persons and property, or
2) in summary proceedings of distraint and levy upon the property of delinquent taxpayers in the collection of internal
revenue taxes, fees or charges or any increment thereto, or 3) in the preventive suspension of a public officer
pending investigation. x x x.11
The Solicitor General also adds that since petitioner is engaged in the recruitment of Filipino workers for work abroad, the
nature of its business calls for the exercise of the state's police power in order to safeguard the rights and welfare of the
Filipino laborers. One such measure is the primary responsibility imposed upon placement agencies with regard to the
repatriation of an OFW or of his remains.
The Solicitor General also argues that the wording of Section 15 of Republic Act No. 8042 leaves no doubt that a recruitment
agency shall bear the primary responsibility for the repatriation of an OFW whether the latter is dead or alive.
Lastly, the Solicitor General insists that actions assailing the validity of implementing rules and regulations are within the
original jurisdiction of the regional trial courts.
We shall first address the procedural question involved in the present petition.
There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or
regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of Appeals or to this
Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules
promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial review or the power to declare a
law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the
courts, including the regional trial courts.12
Section 1, Rule 65 of the 1997 Rules of Civil Procedure states:
SECTION 1. Petition for Certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a

person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.
The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof,
copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum
shopping as provided in the third paragraph of Section 3, Rule 46.
From this, it is clear that in order for a petition for certiorari to prosper, the following requisites must be present: (1) the writ
is directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions; (2) such tribunal, board or
officer has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.
It bears emphasizing that administrative bodies are vested with two basic powers, the quasi-legislative and the quasijudicial.13 In Abella, Jr. v. Civil Service Commission,14 we discussed the nature of these powers to be
In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons before it, in
accordance with the standards laid down by the law. The determination of facts and the applicable law, as basis for
official action and the exercise of judicial discretion, are essential for the performance of this function. On these
considerations, it is elementary that due process requirements, as enumerated in Ang Tibay, must be observed.
These requirements include prior notice and hearing.
On the other hand, quasi-legislative power is exercised by administrative agencies through the promulgation of
rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers
flowing from the separation of the great branches of the government. Prior notice to and hearing of every affected
party, as elements of due process, are not required since there is no determination of past events or facts that have
to be established or ascertained. As a general rule, prior notice and hearing are not essential to the validity of rules
or regulations promulgated to govern future conduct.
In this case, petitioner assails certain provisions of the Omnibus Rules. However, these rules were clearly promulgated by
respondents Department of Foreign Affairs and Department of Labor and Employment in the exercise of their quasilegislative powers or the authority to promulgate rules and regulations. Because of this, petitioner was, thus, mistaken in
availing himself of the remedy of an original action for certiorari as obviously, only judicial or quasi-judicial acts are proper
subjects thereof. If only for these, the petition deserves outright dismissal. Be that as it may, we shall proceed to resolve
the substantive issues raised in this petition for review in order to finally remove the doubt over the validity of Sections 52,
53, 54, and 55 of the Omnibus Rules.
It is now well-settled that delegation of legislative power to various specialized administrative agencies is allowed in the face
of increasing complexity of modern life. Given the volume and variety of interactions involving the members of today's
society, it is doubtful if the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the
need to delegate to administrative bodies, as the principal agencies tasked to execute laws with respect to their specialized
fields, the authority to promulgate rules and regulations to implement a given statute and effectuate its policies.15 All that is
required for the valid exercise of this power of subordinate legislation is that the regulation must be germane to the objects
and purposes of the law; and that the regulation be not in contradiction to, but in conformity with, the standards prescribed
by the law.16 Under the first test or the so-called completeness test, the law must be complete in all its terms and conditions
when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.17 The
second test or the sufficient standard test, mandates that there should be adequate guidelines or limitations in the law to
determine the boundaries of the delegate's authority and prevent the delegation from running riot.18
We resolve that the questioned provisions of the Omnibus Rules meet these requirements.
Basically, petitioner is impugning the subject provisions of the Omnibus Rules for allegedly expanding the scope of Section
15 of Republic Act No. 8042 by: first, imposing upon it the primary obligation to repatriate the remains of the deceased
Razon including the duty to advance the cost of the plane fare for the transport of Razon's remains; and second, by ordering
it to do so without prior determination of the existence of employer-employee relationship between itself and Razon.
Petitioner's argument that Section 15 does not provide that it shall be primarily responsible for the repatriation of a deceased
OFW is specious and plain nitpicking. While Republic Act No. 8042 does not expressly state that petitioner shall be primarily
obligated to transport back here to the Philippines the remains of the deceased Razon, nevertheless, such duty is imposed
upon him as the statute clearly dictates that "the repatriation of remains and transport of the personal belongings of a

deceased worker and all costs attendant thereto shall be borne by the principal and/or the local agency." The mandatory
nature of said obligation is characterized by the legislature's use of the word "shall." That the concerned government
agencies opted to demand the performance of said responsibility solely upon petitioner does not make said directives invalid
as the law plainly obliges a local placement agency such as herein petitioner to bear the burden of repatriating the remains
of a deceased OFW with or without recourse to the principal abroad. In this regard, we see no reason to invalidate Section
52 of the omnibus rules as Republic Act No. 8042 itself permits the situation wherein a local recruitment agency can be held
exclusively responsible for the repatriation of a deceased OFW.
Nor do we see any reason to stamp Section 53 of the Omnibus Rules as invalid for allegedly contravening Section 15 of
the law which states that a placement agency shall not be responsible for a worker's repatriation should the termination of
the employer-employee relationship be due to the fault of the OFW. To our mind, the statute merely states the general
principle that in case the severance of the employment was because of the OFW's own undoing, it is only fair that he or she
should shoulder the costs of his or her homecoming. Section 15 of Republic Act No. 8042, however, certainly does not
preclude a placement agency from establishing the circumstances surrounding an OFW's dismissal from service in an
appropriate proceeding. As such determination would most likely take some time, it is only proper that an OFW be brought
back here in our country at the soonest possible time lest he remains stranded in a foreign land during the whole time that
recruitment agency contests its liability for repatriation. As aptly pointed out by the Solicitor General
Such a situation is unacceptable.
24. This is the same reason why repatriation is made by law an obligation of the agency and/or its principal without
the need of first determining the cause of the termination of the worker's employment. Repatriation is in effect an
unconditional responsibility of the agency and/or its principal that cannot be delayed by an investigation of why the
worker was terminated from employment. To be left stranded in a foreign land without the financial means to return
home and being at the mercy of unscrupulous individuals is a violation of the OFW's dignity and his human rights.
These are the same rights R.A. No. 8042 seeks to protect.19
As for the sufficiency of standard test, this Court had, in the past, accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and welfare," and "simplicity, economy and welfare."20
In this case, we hold that the legislature's pronouncements that Republic Act No. 8042 was enacted with the thought of
upholding the dignity of the Filipinos may they be here or abroad and that the State shall at all times afford full protection to
labor, both here and abroad, meet the requirement and provide enough guidance for the formulation of the omnibus rules.
WHEREFORE, the Petition for Review is DENIED. The Court of Appeals' Decision dated 4 October 2001 and Resolution
dated 18 February 2002 are hereby AFFIRMED. With costs.
SO ORDERED.
Panganiban, C.J., Chairperson, Ynares-Santiago, Austria-Martinez, Callejo, Sr., J.J., concur.

G.R. No. 119361

February 19, 2001

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
CORAZON NAVARRA (At Large) RODOLFO NAVARRA, SR. and JOB NAVARRA, accused.
RODOLFO NAVARRA, SR. and JOB NAVARRA, accused-appellants.
PARDO, J.:
Deceptis non decipientibus, jura subveniunt.*
It is a sad commentary that many of our countrymen migrate to other countries for work. They leave all that is familiar and
endure loneliness and separation from their families and friends for the coveted dollar hoping that such will better their lot
and ensure their families a modicum of economic stability.
What is more disheartening is that there are those who take advantage of the hopefuls. These are the illegal recruiters. On
them, we must let the full force of the law fall, and fall heavily.
The Case
The case is an appeal from the decision of the Regional Trial Court, Branch 90, Quezon City1 finding accused Rodolfo
Navarra, Sr. and Job Navarra (hereafter "Rodolfo" and "Job", respectively) guilty beyond reasonable doubt of illegal
recruitment committed in a large scale resulting to economic sabotage and sentencing each of them to life imprisonment,
to pay a fine of one hundred thousand (P100,000.00) pesos, each, without subsidiary imprisonment in case of insolvency,
and to return to complainants the sums they received from them.
The Facts
Job and Rodolfo, along with Rodolfo's wife2 Corazon, operated an agency which purported to have the authority to recruit
and place workers for employment in Taiwan. The agency3 was named Rodolfo Navarra's Travel Consultant and General
Services ("RNTCGS"),4 which in the course of its operation was able to victimize several hapless victims who never left
Philippine soil, and in due time, filed complaints with the Philippine Overseas Employment Agency (hereafter "POEA")
against accused for illegal recruitment.
Neither RNTCGS nor Rodolfo, Corazon or Job in their personal capacities were licensed or authorized by the Philippine
Overseas Employment Administration to recruit workers for overseas employment.5
The trial court summarized the testimonies of complainants, thus:6
MERLIE VILLESCA identified Rodolfo as the one with whom she applied to for employment in Taiwan on May 6,
1992, at the RNTCGS office in Novaliches, Quezon City. As placement fee she paid fifteen thousand pesos
(P15,000.00) to Inday Padawan (Rodolfo's cook and laundrywoman,7 hereafter, "Inday"), at Corazon and Rodolfo's
house, and another fifteen thousand pesos (P15,000.00) on December 22, 1992. She identified Job as the
administrative officer of RNCTGS, who entertained her and the other applicants during the times she visited the
agency's office to follow up her application.8
GLICERIA MARINAS singled out Job as the one who recruited her for employment in Taiwan as a factory worker.
She testified that she was recruited by Job on April 24, 1992 at RNTCGS where she was told that she and her coapplicants would leave for Taiwan two months after they applied on April 24, 1992. She gave Job all the
requirements the agency asked for including her passport and birth certificate. She was also required to pay a
placement fee of twenty thousand pesos (P20,000.00), although the receipt given to her was only for the amount
of fifteen thousand pesos (P15,000.00). She gave her passport to Job and she handed the placement fee to Inday
who gave it to Corazon in her presence.9
BEINVENIDA AMUTAN testified that while in Rodolfo's house in Novaliches, Quezon City, on May 11, 1992,
Rodolfo promised her that she would be able to leave for Taiwan upon payment of a twenty thousand pesos
(P20,000.00) placement fee. On April 11, 1992, Beinvenida paid the amount to Inday who gave it to Corazon in
Beinvenida's presence. She never had the chance to go to Taiwan. Upon investigation with the POEA, she
discovered that RNTCGS was not registered.10

ERNESTO AMUTAN testified that in April 1992, he filed an application to work at a factory in Taiwan before Corazon
in the RNTCGS office. It was Corazon who interviewed him and asked him to submit some requirements. While at
the said office, he saw Rodolfo there, who gave him the assurance that he would be able to leave for Taiwan
immediately. He was never deployed to Taiwan, despite paying a placement fee of twenty thousand pesos
(P20,000.00).11
FLORIE ROSE RAMOS testified that she applied with RNTCGS as a factory worker for Taiwan and that she paid
a placement fee of twenty five thousand pesos (P25,000.00) and another payment of one thousand pesos
(P1,000.00) as medical fee. She went to RNTCGS during the last weeks of February, March and April 1992 and
was interviewed by Job. She was introduced to Rodolfo by her co-complainant Evelyn Llacas. She was not able to
leave for Taiwan, neither was she able to retrieve her payments from RNTCGS for when she went to the office on
December 23, 1993, it had already been raided by the CIS and POEA for recruiting for overseas employment
without license or authority.12
LIWAYWAY CRUZ testified that she visited Rodolfo and Corazon's house and came to know that Rodolfo was the
President of RNTCGS, an agency which deported itself to her as and agency purporting to have authority to recruit
workers for placement in Taiwan. That on April 1993, she went to Rodolfo's house to inquire about the processing
of her papers for employment in Taiwan. There she was assured by Rodolfo that Corazon was in Taiwan and was
already taking care of her application.13
LOIDA MACASO testified that she came to know Rodolfo when she visited Inday on December 3, 1991, at
Rodolfo's house and Rodolfo and Corazon recruited her to work as a factory worker in Taiwan. For this purpose
she paid the spouses ten thousand pesos (P10,000.00) placement fee on January 8, 1992. She was never sent to
Taiwan.14
On December 22, 1992, (PC) CIS agents arrested Inday Padawan after she received placement fees from complainant
Merlie Villesca.15 The amount received was one thousand pesos (P1,000.00) in one hundred peso (P100.00) bills, which
were dusted with ultraviolet powder.16
On February 26, 1993, Assistant Provincial Prosecutor of Bulacan Emily G. Reyes, on detail with the Department of Justice,
filed with the Regional Trial Court, Quezon City, Branch 90, an information against accused for illegal recruitment committed
in a large scale. We quote:17
"That on or about February, 1992 and sometime prior and subsequent thereto in Quezon City, Metro Manila,
Philippines, and within the jurisdiction of this Honorable Court above-named accused conspiring, confederating and
mutually helping one another, representing themselves to have the capacity to contract, enlist and transport workers
for employment abroad, did then and there willfully, unlawsfully and for a fee, recruit and promise employment/job
placement to MERLIE VILLESCA, GLICERIA MARINAS, JOSE LLORET, BEINVENIDA AMUTAN, MELBA
YACAS, MARITES DE SAGUN, VILMA MARANA, ERNESTO AMUTAN, FLORIE ROSE RAMOS, RONALD
ALLAN SANTOS and HENRY DELA CRUZ without first securing the required license and/or authority from
Philippine Overseas Employment Administration.
"CONTRARY TO LAW."
On April 29, 1993, upon arraignment, Job pleaded "not guilty."18
On July 14, 1993, upon arraignment, Rodolfo likewise pleaded "not guilty."19
After due trial, on December 29, 1994, the trial court rendered a decision convicting Rodolfo and Job, thus:
"ACCORDINGLY, the Court hereby finds both accused RODOLFO NAVARRA, SR. and JOB NAVARRA guilty of
the crime of Illegal Recruitment Committed in a Large Scale Resulting to Economic Sabotage, as charged in the
Information, and hereby sentences each of them to Life Imprisonment and also each of them to pay a fine of
P100,000.00, without subsidiary imprisonment incase of insolvency pursuant to Art. 39 (a) of the Labor Code.
"They are likewise ordered to return to complainants Florie Rose Ramos the sum of P25,000.00; to Ernesto Amutan,
P15,000.00; to Bienvenida Amutan, P15,000.00; to Loida (Loyda) Macaso, P10,000.00; to Gliceria Marinas,
P15,000.00; and to Merlie (Merly) Villesca, P30,000.00.

"Let alias warrants of arrest be issued for accused Corazon Navarra, said warrants to be served by both the National
Bureau of Investigation and the Eastern Police District Command.
"SO ORDERED."20
Hence, this appeal.21
Rodolfo and Job submit that the trial court gravely erred in disregarding their defense of denial and in finding them guilty
beyond reasonable doubt of the offense charged.22
The Court's Ruling
We find the appeal without merit.
Bare denials, within clear and convincing evidence to support them,23 can not sway judgment. They are self-serving
statements,24 that are inherently weak and can easily be put forward.25
The rule is well-entrenched that as an appellate court, we will not disturb the findings of the trial court on credibility of
witnesses as it was in a better position to appreciate the same. The rule is specially so given that there is no showing that
the trial court plainly overlooked certain facts of substance or value, which, if considered, may affect the result of the case.26
Illegal recruitment has two essential elements: First, the offender has no valid license or authority required by law to enable
him to lawfully engage in the recruitment and placement of workers. Second, the offender undertakes any activity within the
meaning of "recruitment and placement" defined under Article 13 (b), or any prohibited practices enumerated under Article
34 of the Labor Code.27
Recruitment and Placement
A "nonlicensee or nonholder of authority" means any person, corporation or entity without a valid license or authority to
engage in recruitment or placement from the Secretary of Labor, or whose license or authority has been suspended, revoked
or cancelled by the Philippine Overseas Employment Administration or the Secretary of Labor.28 Under Article 13(b) of the
Labor Code, "recruitment and placement" refer to:
"any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes
referrals, contract services, promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, that any person or entity which in any manner, offers or promises for a fee employment to two or more
persons shall be deemed engaged in recruitment and placement."
From the evidence adduced, accused-appellants committed acts of recruitment and placement, such as promises to the
complainants of profitable employment abroad and acceptance of placement fees. Accused-appellants gave the impression
that they had the power to send the complainants to Taiwan for employment.29
With the certification from the Department of Labor and Employment stating that RNTCGS was not authorized to recruit
workers for overseas employment,30 and promises by the accused of employment abroad for complainants on payment of
placements fees, the conclusion is inescapable that accused are liable for illegal recruitment.31
Economic Sabotage
Article 38 (b) of the Labor Code, as amended by P. D. No. 2018 provides that illegal recruitment shall be considered an
offense involving economic sabotage if any of the following qualifying circumstances exists: First, when illegal recruitment
is committed by a syndicate. For purposes of the law, a syndicate exists when three or more persons conspire or confederate
with one another in carrying out any unlawful or illegal transaction, enterprise or scheme.32 Second, there is economic
sabotage when illegal recruitment is committed in a large scale, as when it is committed against three or more persons
individually or as a group.33
The acts of accused-appellants showed unity of purpose. All these acts establish a common criminal design mutually
deliberated upon and accomplished through coordinated moves.34

Even assuming that there was no conspiracy, the record clearly shows illegal recruitment committed in a large scale, since
at least six (6) complainants were victims, which is more than the minimum number of persons required by law to constitute
illegal recruitment in a large scale, resulting in economic sabotage.1wphi1.nt
Penalty Imposable
The penalty imposable on such offense is life imprisonment and a fine of one hundred thousand pesos (P100,000.00).35
The Fallo
WHEREFORE, the Court AFFIRMS the decision of the Regional Trial Court, Quezon City, Branch 90 in Criminal Case No.
93-42592, dated December 29, 1994.
Costs against accused-appellants.
SO ORDERED.
Davide, Jr., Puno, Kapunan, and Ynares-Santiago, JJ., concur.

G.R. No. 124439

February 5, 2004

PEOPLE OF THE PHILIPPINES, appellee

vs.
FLOR GUTIERREZ Y TIMOD, appellant.
DECISION
TlNGA, J.:
In its decision dated 22 March 1996, the Regional Trial Court (RTC) of Pasay City, Branch 1081 found accused Flor Gutierrez
y Timod guilty beyond reasonable doubt of Illegal Recruitment in Large Scale and sentenced her to suffer the penalty of life
imprisonment and to pay a fine of P100,000.00.
The Information in Criminal Case No. 95-6796 reads as follows:
That from the months of April to August 1994 in Pasay City, Philippines, and within the jurisdiction of this Honorable Court,
accused FLOR GUTIERREZ Y TIMOD conspiring and confederating with CECILIA BAUTISTA, ESTHER GAMILDE, LINDA
RABAINO and MARILYN GARCIA (whose present whereabouts are unknown) and mutually helping one another, acting in
common accord, did then and there, willfully, unlawfully and feloniously, engage in recruitment activities for overseas job
placement and actually contract, enlist and recruit EVELYN V. RAMOS, ROSEMARIE I. TUGADE, GENEROSA G.
ASUNCION and ROSALYN B. SUMAYO as domestic helpers in Dubai, United Arab Emirates, for a fee of various amounts
ranging from P10,000.00 to P15,000.00 each, without first obtaining the required license and/or authority from the Philippine
Overseas Employment Administration (POEA).
CONTRARY TO LAW.2
Arraigned on April 24, 1995, the accused entered a plea of not guilty. The version of the prosecution is as follows:
On April 18, 1994, Rosemarie Tugade went to the house of one Celia Bautista, a "recruiter-agent" of the accused, at Brgy.
Bulala, Vigan, Ilocos Sur.3 Celia told Rosemarie that she had to submit the following requirements for her application to
work in Dubai as a domestic helper: P4,000.00 as placement fee, P1,200.00 for passport, P850.00 for "medical," six (6) 2x2
pictures and her original birth certificate.4
The next day, Rosemarie, together with "recruiter-agent" Celia Bautista and fellow applicant Evelyn Ramos, traveled to
Manila to the house of one Esther Gamilde, another of the accused's "recruiter-agents."5 There, Rosemarie and Evelyn
filled out their bio-data forms. The two then underwent a medical examination before having their whole-body picture taken.
Esther told them that they would know the results of their application from Celia.6
Two weeks later, Celia told Rosemarie that her application for Dubai was already approved and that she will be receiving
$150.00-dollars per month. For the first three (3) months, however, there will be salary deductions.7
On August 27, 1994, Rosemarie and Evelyn, along with Celia and Esther, went to the accused's office at Sarifudin
Manpower and General Services at EDSA Extension, Pasay City. 8 The accused told Rosemarie that she needed to pay
P2,000.00 more.9 The accused said she had received all of Rosemarie's documents and the money paid to Celia.10 Trusting
in Celia, Rosemarie did not demand a receipt from the accused.
On August 31, 1994, the accused asked Rosemarie to give P500.00 as terminal fee for her departure in a week's time.11
Rosemarie paid the amount, as evidenced by a receipt.12 The scheduled departure did not push through, however. Instead,
Rosemarie was told that she was to leave on September 15, 1994, but, again, this did not materialize.13 A series of
postponements followed until finally she was told that she would be leaving before Christmas 1994. Almost predictably, her
trip never came to pass.14
Private complainant Evelyn Ramos was with Rosemarie when she went to Celia Bautista's house on April 19, 1994.15 Celia
told Evelyn that for P4,000.00 she could leave for Dubai to work as a domestic helper.16 Like Rosemarie, Evelyn gave all
her documents and paid the fees to Celia, who in turn handed them to Esther Gamilde in Tondo.17 On June 10, 1994,
Ramos gave Bautista P8,000.00, which was also turned over to Gamilde.18

On August 22, 1994, Celia told Evelyn that she only had to wait one more week before she left for Dubai.19 On August 27,
1994, Esther brought Evelyn to the accused's office,20 where the accused asked for an additional P2,000.00 as processing
fee for the Philippine Overseas Employment Agency (POEA).21 Evelyn paid the amount on August 31, 1994,22 including a
terminal fee of P500.00. Like Rosemarie, Evelyn was not able to leave the country despite the accused's promises.
Another complainant, Rosalyn D. Sumayo, also applied for overseas job placement as a domestic helper in Dubai. Her
experience was more agonizing. In her case, it was one Marilyn Garcia who assisted Rosalyn.23 She submitted a copy of
her birth certificate, six (6) copies of 2 x 2 pictures, two (2) copies of her whole-body picture, passport, and medical
certificate.24 Marilyn also asked Rosalyn to pay: a processing fee of P7,500.00, P2,620.00 as full tax, P500.00 as terminal
fee, and P3,000.00 as service charge.25
All the documents and money given by Rosalyn to Marilyn were subsequently remitted to the accused at her office on June
28, 1994.26 The accused told Rosalyn that she would be leaving anytime, but after three months, Rosalyn's departure did
not push through.27
Despite the setback, the accused kept assuring Rosalyn that she would still be able to leave.28 One time, the accused
brought her to the airport and instructed her to hide in the airport restroom.29 After fifteen minutes, the accused told her that
they had to leave the airport because "mahigpit sa immigration."30 On another occasion, the accused directed Rosalyn to
hide inside the Kayumanggi Restaurant for fifteen (15) minutes.31 Nothing happened after, though, and they went home.
On November 14, 1994, Rosalyn was again at the airport.32 The accused warned her, though, that if the Immigration Officer
insisted on seeing her papers, it would be better for her to leave. 33 As directed, she left the airport when she was asked to
produce her documents.34
Exasperated, Rosalyn went to the accused's house and demanded the return of her money and her documents. Instead of
acceding to Rosalyn's demands, the accused shouted at her and warned her that she had to pay a cancellation fee of
$300.00.35 Rosalyn was not able to give the amount so she stayed with the accused, who assured her that she would still
be able to leave the country and that she would receive a monthly salary of $150 to $200.36 These promises were never
fulfilled. Rosalyn thus went to the POEA, where POEA Administrator Felicisimo Joson, Jr. informed her that the accused
did not have a license to recruit.37
Generosa Asuncion suffered the same fate as her co-applicants. In August 1994, she applied for overseas job placement
with one Linda Rabaino.38 Generosa submitted her passport, medical certificate, clearance from the National Bureau of
Investigation (NBI), birth certificate, bio-data and pictures.39 She also paid P15,000.00 in two installments on September 9
and 12, 1994,40 which payments were not receipted.
Linda told Generosa she would be leaving on September 13, 1994.41 However, she was not able to leave because,
according to Linda, at 25, Generosa was under-aged.42
Linda then referred Generosa to the accused in the latter's office, where Linda turned over Generosa's documents as well
as the P15,000 00 to the accused.43 The accused promised that Linda would be able to leave, but her departure never took
place.44 When Generosa demanded the return of her money and her documents, the accused told her that she had to pay
a cancellation fee of $600.00.45 Stunned, Linda just opted to await the further outcome of her application.46 Her waiting was
all for naught.
With the promises of jobs abroad unfulfilled, complainants decided to verify if the accused was a licensed recruiter. Upon
learning from the POEA that she was not so licensed,47 they proceeded to the Philippine Anti-Crime Commission (PACC)
to execute their respective affidavits.48
SPO4 Johnny Marqueta investigated the women's complaint. He confirmed with the POEA that the accused was not
licensed or authorized to recruit overseas contract workers.49 The four complainants also informed him that the accused
wanted to meet with the group on January 26, 1995.50 SPO4 Marqueta thus had their money, totaling P2,000.00,51 marked
at the National Bureau of Investigation (NBI) Forensic Section for their entrapment operation.52
On January 26, 1995, the accused met with the four complainants at Jollibee, Commonwealth Avenue, Quezon City. As
soon as she finished counting the marked money and wrapping it in Jollibee napkins, the accused was arrested.53
In her defense, the accused claimed that as an "employee" of a duly licensed agency who was tasked to recruit and offer
job placements abroad, she could not be held liable for illegal recruitment.54 She admitted that she had no authority to recruit

in her personal capacity,55 but that her authority emanated from a Special Power of Attorney (SPA) and a Certification issued
by a licensed agency.56
At the time complainants applied for overseas employment, the accused was "employed" as a Marketing Directress of
Sarifudin Manpower and General Services,57 a duly licensed agency with License No. OS-91-LB-61193-NL issued by the
Department of Labor and Employment.58 A Special Power of Attorney (SPA) from Sarifudin, dated May 1, 1994,59 states
that she was authorized:
1. To negotiate, enter into business transactions for manpower supply particularly in the Middle East countries;
2. For and in behalf of SARIFUDIN, MANPOWER AND GENERAL SERVICES using as guidelines and terms and
conditions by both parties to secure:
(a) Verified Job Orders;
(b) Special Power of Attorney;
(c) Copy of Certified Certificate of Business Registration;
(d) VISA Authorization and/or NOC VISA.
....60
A Certification61 dated February 3, 1995, issued by the same agency, also states that: "MRS. FLOR T. GUTIERREZ was
(sic) employed as OVERSEAS MARKETING DIRECTRESS of SARIFUDIN MANPOWER AND GENERAL SERVICES,
effective May 1994, up to the present"62
The defense also submitted several documents to prove compliance with the requirements of the agency for her to assume
her duties under the SPA. These include receipts63 for a cash bond in the amount of P30,000.00 that she paid in several
installments. She also paid a royalty fee of P4,000.0064 and an office rental fee of P3,000.00.65
The accused was also required by the agency to submit a monthly report for June 1994, as evidenced by a Memorandum
signed by the General Manager, Leah Salud.66 She submitted said monthly report, indeed, several monthly reports.67 A
document calling on all Marketing Directresses/Directors to attend a meeting on July 8, 1994, was also presented.68
The accused did not receive any salary or allowances from Sarifudin but received commissions from the agency's principals,
the employers from foreign countries (ten in the Middle East and two in Singapore) at the rate of U.S. $100.00 per person.69
From her commissions, she paid rent and royalty to Sarifudin.70
Edwin Cristobal, POEA Labor Employment Officer, confirmed that Sarifudin was duly licensed to engage in recruitment
activities.71 He presented a Certification issued by Ma. Salome S. Mendoza, Manager of the Licensing Branch72 and
containing the list of officers and staff of Sarifudin. On said list appear the names "Florna Gutierrez" and "Flor Gutierrez,"73
apparently, one and the same person.74 In the same Certification, appears the following:
It is further certified that the said agency revoked the appointment of Ms. Flor Gutierrez as Overseas Mktg. Director/Manager
in a letter dated Dec. 15, 1995, although this Office has not received nor acknowledged the representation of Ms. Gutierrez.75
Cristobal explained that the POEA, "Never had a letter from Sarifudin registering or authorizing Flor Gutierrez... rather,
[what] we received [was a] revocation of her appointment."76 He also revealed that the name of the accused does not appear
in the records of the POEA as being employed by the agency from the assumption of its license on June 11, 1993, up to its
termination on June 11, 1995.77
The defense likewise alleged that complainants Rosemarie Tugade and Evelyn Ramos executed Affidavits of Desistance
dated May 12, 1995,78 stating that the accused had returned to them the amounts they paid her and that the complaint was
a result of a misunderstanding.
On March 22, 1996, the trial court rendered its Decision finding the accused guilty beyond reasonable doubt of Illegal
Recruitment in Large Scale:

WHEREFORE, after evaluating all the foregoing, the accused FLOR GUTIERREZ is hereby found guilty beyond reasonable
doubt of Illegal Recruitment in Large Scale, and judgment is hereby rendered as follows:
(a) Convicting the accused of Illegal Recruitment in Large Scale and sentencing her to suffer the penalty of life
imprisonment and payment of P100,000.00 fine;
(b) No reimbursement to complainants is needed since their money have already been returned;
(c) Accused to pay moral damages in the amount of P50,000.00 to each complainant;
(d) Accused to pay exemplary damages in the amount of P50,000.00 to each complainant; and
(e) To pay the costs of the suit.79
Accused Flor Gutierrez filed the present appeal seeking the reversal of her conviction.
Illegal recruitment is committed when two elements concur, namely: (1) the offender has no valid license or authority
required by law to enable one to lawfully engage in recruitment and placement of workers; and (2) he undertakes either any
activity within the meaning of "recruitment and placement" defined under Art. 13(b), or any of the prohibited practices
enumerated under Art. 34 of the Labor Code.80 Art. 13(b) of the Labor Code defines "recruitment and placement" as "any
act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers, and includes referrals, contract
services, promising or advertising for employment, locally or abroad, whether for profit or not: Provided, That any person or
entity which, in any manner, offers or promises for a fee employment to two or more persons, shall be deemed engaged in
recruitment and placement."81
The crime becomes Illegal Recruitment in Large Scale when the two elements concur, with the addition of a third element:
the recruiter committed the same against three or more persons, individually or as a group.82
Appellant argues that as a representative of a duly licensed recruitment agency, she cannot be held guilty of Illegal
Recruitment in Large Scale. We disagree.
Section 11, Rule II, Book II of the Rules and Regulations Governing Overseas Employment requires the prior approval of
the POEA of the appointment of representatives or agents:
Section 11. Appointment of Representatives. Every appointment of representatives or agents of licensed agency shall
be subject to prior approval or authority of the Administration.
The approval may be issued upon submission of or compliance with the following requirements:
a. Proposed appointment or Special Power of Attorney;
b. Clearances of the proposed representative or agent from NBI;
c. A sworn or verified statement by the designating or appointing person or company assuming full responsibility
for all the acts of the agent or representative done in connection with the recruitment and placement of workers.
Approval by the Administration of the appointment or designation does not authorize the agent or representative to establish
a branch or extension office of the licensed agency represented.
Any revocation or amendment in the appointment should be communicated to the administration. Otherwise, the designation
or appointment shall be deemed as not revoked or amended.
Section 1, Rule X of the same Book, in turn, provides that "recruitment and placement activities of agents or representatives
appointed by a licensee, whose appointments were not authorized by the Administration shall likewise constitute illegal
recruitment."
The Certification from the POEA that it "has not received nor acknowledged the representation of Ms. Gutierrez" establishes
that the appointment of appellant by Serafudin as a representative or agent was not authorized by the POEA. It may be true

that the POEA received from Serafudin a revocation of appellant's appointment, but still is of no consequence since
Serafudin in the first place did not submit her appointment to the POEA, and so the POEA has nothing to approve.
As found by the trial court83 the evidence on record, notably appellant's own version, indicates that she was running her
own labor recruitment business.
Appellant cannot escape liability by claiming that she was not aware that before working for her employer in the recruitment
agency, she should first be registered with the POEA.84 Illegal recruitment in large scale is malum prohibitum, not malum in
se.85 Good faith is not a defense.
That appellant engaged in recruitment and placement is beyond dispute. The complaining witnesses categorically testified
that the accused promised them on several occasions that they would be leaving for work abroad. Appellant received
complainants' money and documents, a fact that the complainants themselves witnessed and which the accused
acknowledged when she returned the same to them after the filing of the case against her. Appellant even brought
complainant Rosalyn Sumayo to the airport three times, raising her expectations, but leaving her hanging in mid-air. The
accused even had the audacity to demand cancellation fees from the complainants when they asked for a refund.
The Affidavits of Desistance executed by two of the complainants deserve little weight. The Court attaches no persuasive
value to affidavits of desistance, especially when executed as an afterthought. As held in the case of People v. Ubina,86 "it
would be a dangerous rule for courts to reject testimonies solemnly taken before the courts of justice simply because the
witnesses who had given them later on changed their mind for one reason or another; for such rule would make solemn
trials a mockery and place the investigation of truth at the mercy of unscrupulous witnesses."87
As appellant committed illegal recruitment against three or more persons, she is liable for Illegal Recruitment in Large Scale.
WHEREFORE, the Decision of the Regional Trial Court, finding appellant Flor Gutierrez y Timod guilty beyond reasonable
doubt of the crime of Illegal Recruitment in Large Scale and sentencing her to life imprisonment and to pay a fine of
P100,000.00 is AFFIRMED.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Callejo, Sr., JJ., concur.

G.R. No. 119076

March 25, 2002

PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
ROGER SEGUN and JOSEPHINE CLAM, accused-appellants.
KAPUNAN, J.:
Appellants Roger Segun and Josephine Clam were charged before the Regional Trial Court (RTC) of Iligan City with
violating Article 38 of the Labor Code, as amended, in an information reading:
That on or about the 3rd day of March, 1993 and for sometime thereafter, at Linamon, Lanao del Norte, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating and
mutually helping each other, did then and there willfully, unlawfully and feloniously canvass, enlist, contract,
transport and recruit for employment the following persons, namely:
1. Mario Tambacan;
2. Mary Jane Cantil;
3. Richard Araas;
4. Victoria Collantes;
5. Christine Collantes;
6. Rogelio Collantes;
7. Luther Caban;
8. Loreta Caban;
9. Jonard Genemelo;
10. Jhonely Genemelo;
11. Pedro Ozarraga;
12. Pablo Ozarraga; and
13. Pacifico Villaver,
Without any license and/or authority to engage in recruitment and placement of workers from the Department of
Labor and Employment.1
Upon arraignment, appellants pleaded not guilty to the above charges.
The prosecution presented eight (8) witnesses, namely, Francita L. Manequis, Conchita Tambacan, Josephine Aba, Melecio
Ababa, Rogelio Collantes, Loreta Caban, Christine Collantes and Elena Araas.
Manequis, Employment Officer III and Administrative Officer of the Department of Labor and Employment (DOLE), identified
two certifications issued by Allan Macaraya, then DOLE Director for Region XII.2 The first Certification,3 dated October 7,
1993, stated that "per records available in this Office" appellants were "neither licensed nor authorized by this Department
to recruit workers for overseas employment." The second,4 dated May 17, 1993, was "issued upon the request of [the]
Honorable Mayor of Linamon, Lanao del Norte, Mayor Alejandro C. Alfeche." It stated that appellants, "per records of this
Office," were "not authorized to conduct recruitment for local and overseas employment."

Conchita Tambacan, 50, married, a tobacco vendor and a resident of Linamon, Lanao del Norte testified that her son Mario,
then 17, was "recruited" by appellants on March 6, 1993 and brought to Manila. She knew that he was recruited only
because "many told [her]." Her son did not consult her regarding the recruitment. At the time of her testimony, her son had
sent her only two letters from Cabanatuan City but had not returned home to Linamon, Lanao del Norte.
After learning of her sons recruitment, Mrs. Tambacan went to the Mayor of Linamon who, in turn, verified from DOLE
whether appellants had any authority to undertake recruitment. Subsequently, the mayor handed Mrs. Tambacan the
certification dated May 17, 1993.5
Josephine Ozarraga Aba, 28, married, a housekeeper, and a resident of Linamon, is the aunt of twins Pedro and Pablo
Ozarraga. Pedro and Pablo, then 18, are the sons of her deceased sister. Mrs. Aba testified that sometime in March or April
1993 her nephews told her that they wanted to go to Manila and that they were "recruited." Her nephews were then jobless
and were looking for work. Mrs. Aba went to appellants house to inquire from appellants, who were her neighbors, if what
her nephews told her was true. In appellants house, she saw appellants, her nephews, among others. Appellants told her
that her nephews would be given free fare to Manila, free meals and good wages. These they also promised her nephews.
Mrs. Aba claimed that appellants brought one of the twins to Cabanatuan and the other to Bulacan. When she testified, her
nephews had not yet returned to Linamon.6
Melecio Ababa, 64, married, a fish vendor, and a resident of Linamon, Lanao del Norte, is the grandfather of Jhonely and
Jonard Genemelo. Sometime in April 1992, Ababa learned that appellants had "recruited" his grandsons. Ababa asked his
grandsons, "Why will you work there [in Cabanatuan City] [when] in fact you can find jobs here?" Ababa went to the house
of appellants who assured him that the transportation to Manila was free, and that his grandsons were to be provided free
meals and paid good wages. Because of these promises, he acquiesced to the recruitment. At the time of his testimony,
Ababas grandsons had not returned to Linamon. All he received from them were two letters but no money.7
Another complainant, Rogelio Collantes, 44, jobless and a resident of Linamon, Lanao del Norte, is the husband of Victoria
Collantes and the father of Christine, then 13, and Rogelio, Jr., then 6. Sometime in April 1993, Rogelio learned that
appellants had "recruited" Victoria, Christine and Roger. Rogelio talked to appellants who promised that his wife and
childrens transportation to Manila and meals will be free and that they will receive good wages. Victoria, Christine and
Rogelio, Jr., who were then looking for jobs, were then brought to Cabanatuan City.
At the time of his testimony, Rogelios children had already returned to Linamon, traveling home with appellant Josephine
Clam. Collantes wife, though, was still in Nueva Ecija. She had sent letters to Rogelio thrice, and money twice, once in the
amount of P1,000.00 and the other time P800.00.8
The prosecution also presented Rogelios daughter Christine, who was among those allegedly recruited by appellants.
Christine said her parents were jobless during the months of March and April 1993 and were looking for work. Upon the
invitation of appellants, she and her mother went to the house of appellants on March 26, 1993. Appellants offered her
mother a job. Christine went with her mother to Cabanatuan City where her mother forced her to work. According to
Christine, those "recruited" totaled thirteen, including her mother and her brother. She and the others took a boat to Manila
and Cabanatuan City. Appellants shouldered the transportation expenses.
In Cabanatuan, Christine did housework for a certain Engr. Sy for seven (7) months. She was paid P500.00 a month. She
returned home in Linamon on December 4, 1993. Neri Clam, Josephines sister, paid for her fare to Manila.
Like Christine, her mother Victoria also performed housework in Cabanatuan City for a certain Mabini Llanera. Her brother,
Rogelio, Jr., was not able to find work because he was still a child.9
Loreta Cavan,* 14, and also a resident of Linamon, Lanao del Norte, testified that sometime in March 1993, she was
"recruited" by appellants and brought to Manila then to Cabanatuan City. She related that she met appellants in the house
of Josephine Clam, where she was recruited. Appellants told her that Cabanatuan City was a "good place" "because the
salary [was] big." Loreta agreed to go. Loreta further stated that those "recruited" by the couple totaled thirteen, including
the twin brothers Pedro and Pablo, a certain woman named Pasbel, a certain Johnny, and Loretas sister Luther.
At Cabanatuan City, Loreta was able to work for a certain Barangay Captain Centioco for three (3) months for P600.00 a
month. Loreta purportedly was not paid for her services since her two months salary was supposed to pay for her fare to
Manila.

Loreta denied that she went to the house of appellants to seek their help. Rather, appellants allegedly offered her a job.
Appellants invited her to go to their house on March 27, 1993. Loreta learned from her sister Luther that appellants were
recruiting.
Loretas sister Luther, who was among those listed in the information as having been recruited by appellants, went to Manila
to work but her job was not provided by appellants.10
The prosecution also offered the testimony of Ester Cavan, the mother of Loreta Cavan, to corroborate the latters testimony.
The same was dispensed with, however, the corroborative nature thereof having been admitted by counsel for the defense.11
Finally, Elena Araas, mother of Richard Araas, related that on March 6, 1993 appellants brought her son, then 19, to
Cabanatuan City. Her son, who was then looking for work, was promised that he would be given a good salary. She learned
of the promise when she went to appellants house where she saw appellants, her son, among others. Elena claimed that
she was present when appellants approached her son and offered him work in Cabanatuan City. Elena agreed to the
recruitment of her son because of the promise of a good salary. However, she has not heard from her son since he left nor
had she received any money from him.12
Appellants defense was predicated on denial. They presented five witnesses to support their case.
Myrna Sasil, 35, married, a housekeeper and a resident of Iligan City, testified that in March 1993 she went to the appellants
residence to ask them to find a job in Manila for her daughter Margie. Prior to that, Myrna had known appellants for almost
a year. She knew that appellants could help their daughter find work in Manila because they just came from Manila
themselves. She said that before she went to appellants house, she did not know that appellants were sending people to
Manila for work. As Myrnas family was then suffering from financial difficulties, Josephine agreed to find work for Myrnas
daughter.
According to Myrna, Margie left with the thirteen persons listed in the information as having been recruited by appellants.
Appellants paid for Margies fare to Manila, which she reimbursed from her salary. At the time of Myrnas testimony, Margie
was still working in Cabanatuan City and was sending Myrna money from her salary.13
Losendo Servano, 50, married, a farmer and a resident of Linamon, Lanao del Norte, is a neighbor of appellants as well as
those of the thirteen persons they allegedly recruited. Losendo had known Josephine Clam since she was born, and Roger
Segun when the latter and Josephine got married.
Losendo testified that his son Ruel did not have work in Linamon. If Ruel stayed in Linamon, Losendo said he would become
a hoodlum or a delinquent. His son thus requested appellants to take him with them to Manila and find work for him, saying
"Manang, Manong, I just go with you to Manila."
In April 1993, Ruel, appellants and thirteen others left for Manila by boat. Appellants shouldered Ruels expenses in going
to Manila. When Ruel was able to find work, he paid appellants by installment. Losendo claims that his son found work
through the help of appellants.14
Virgincita Ozarraga, 30, a housekeeper and a resident of Linamon, Lanao del Norte, is the sister of appellant Josephine
Clam. She is also the aunt of the twins Pedro and Pablo Ozarraga and a neighbor of the thirteen persons allegedly recruited
by appellants.
According to Virgincita, Josephine Clam went to Nueva Ecija in 1991 but transferred in 1992 to Dagupan City. In both
places, Josephine worked as a house helper. Roger Segun, on the other hand, worked as liaison officer for Rolmar
Employment Services.
Virgincita disputed Conchita Tambacans testimony that appellants recruited the latters son Mario. She said that Mario went
to appellants house. Josephine did not promise him a job because they were not recruiters although appellants assured
him they would help him find a job.
Virgincita further testified that in March 1993 Pedro and Pablo Ozarraga also went to the house of Virgincitas mother to ask
appellants to help them find work because there were times they could not eat. Josephine allegedly told the twins that she
was not a recruiter but she would help them find work. She purportedly said the same thing to Jhonely and Jonard
Genemelo, Victoria and Christine Collantes, and Loreta and Luther Cavan. Josephine also told them that she was not
promising them anything.

Appellants and the thirteen persons they purportedly recruited left for Manila by boat. Appellants paid for their fare and were
able to find work for them in Manila, Cabanatuan and other places in Luzon. Thereafter, appellants returned to Linamon. To
Virgincitas knowledge, no people sought their help to find them jobs after the couple returned from Manila.15
Appellant Roger Segun, 34, single, is an employee of the Rolmar Employment Services. As the liaison officer of the agency,
appellant undertakes the processing of the papers for the agencys license.
According to appellant, around April and May of 1993, the thirteen persons listed in the information went to the house of
Josephine Clam to ask her to help them find jobs in Cabanatuan City. Their neighbors knew that Josephine used to work in
Cabanatuan City, Pangasinan and Dagupan City. Josephine told them that she was not a recruiter although she would help
them find work.
Appellants accompanied the thirteen to Manila as they (appellants) were going there anyway. Appellants shouldered their
neighbors transportation and other expenses from Linamon to Cabanatuan City upon the promise that they (appellants)
would be paid back. Eventually, some paid while others did not. Roger did not bother to ask for payment from those who
did not pay. He claimed he was able to help find jobs for their neighbors by recommending them to friends who needed
helpers and workers. Until they were able to find jobs, the thirteen stayed in Rogers house in Cabanatuan City.
Roger admitted that neither he nor Josephine Clam had a license to recruit. He said he was not a recruiter. He also revealed
that after he brought the thirteen to Manila, he tried to secure a license to recruit but his application was disapproved.16
Appellant Josephine Clam, 28, single, and residing at Linamon, Lanao del Norte, used to work as a house helper in
Pangasinan and Bulacan for a year after which she returned to Linamon.
Around March and April 1993, the thirteen persons listed in the information went to her house to ask her help to find them
work. They knew that Josephine used to work in Pangasinan and Dagupan. She told them she would try her best to help
them but informed them that she was not a recruiter.1wphi1.nt
Roger and Josephine shouldered their neighbors transportation and food expenses on the condition that their neighbors
reimburse appellants once they found jobs. Some of them eventually paid them back although others did not. Appellants
were able to find jobs for the thirteen since Roger had many friends.
Josephine admitted that she did not have any license to recruit since she was not a recruiter. She and Roger helped their
neighbors find jobs because she took pity on them when they begged her to help them find jobs. She even spent her and
Rogers joint savings to answer for her neighbors expenses.17
Based on the foregoing evidence, the Iligan City RTC convicted appellants for violating Article 38 of the Labor Code, as
amended:
WHEREFORE, finding the accused guilty beyond reasonable doubt of Illegal Recruitment of the 13 persons
mentioned in the information, namely: Mario Tambacan, Mary Jane Cantil, Richard Aranas, Victoria Collantes,
Christine Collantes, Rogelio Collantes, Luther Caban, Loreta Caban, Jonard Genemilo, Jhonely Genemilo, Pedro
Ozarraga, Pablo Ozarraga and Pacifico Villaver in a large scale, the accused are hereby sentenced to suffer a
penalty of life imprisonment for each of them and to pay a fine of P100,000.00 each. The bail bond put up by the
accused is hereby ordered cancelled, in view of the penalty imposed by this Court of life imprisonment, which is a
nonbailable offense.
SO ORDERED.18
Appellants contend that their guilt was not proven beyond reasonable doubt. They maintain that it was their neighbors who
approached them in the house of Josephine Clams mother and solicited their assistance in their (the neighbors) desire to
go to Manila. Josephine Clam had a history of employment in Luzon and had just returned to Linamon. In Josephine, the
neighbors saw an opportunity to taste economic progress and escape poverty and stagnation. Appellants took pity on them
and helped them find jobs, even defraying their neighbors travel expenses. They submit, therefore, that they were not
engaged in the recruitment of persons for employment but in pursuit of a lawful and noble endeavor for the benefit of the
less fortunate. They neither collected nor received any consideration for their efforts. Appellants point out that of the 13
allegedly recruited only Christine Collantes and Loreta Cavan testified against them. Considering these circumstances,
appellants submit that the evidence against them is at most ambiguous and inconclusive.19

The crime of illegal recruitment in large scale is committed when three elements concur. First, the offender has no valid
license or authority required by law to enable one to lawfully engage in recruitment and placement of workers. Second, he
or she undertakes either any activity within the meaning of "recruitment and placement" defined under Article 13 (b), or any
prohibited practices enumerated under Article 34 of the Labor Code. Third, the offender commits said acts against three or
more persons, individually or as a group.20
There is no dispute that the first element is present in this case. The certification dated May 17, 1993 and issued by DOLE
Region XII Director Allen Macaraya, states that appellants "were not authorized to conduct recruitment for local and
overseas employment." Both appellants conceded they have no license to recruit.21
The next question is whether appellants undertook any activity constituting recruitment and placement as defined by Article
13 (b) of the Labor Code, which states:
"Recruitment and Placement" refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or
procuring workers, and includes referrals, contract services, promising or advertising for employment, locally or
abroad, whether for profit or not: Provided, That any person or entity which, in any manner, offers or promises for
a fee employment to two or more persons shall be deemed engaged in recruitment and placement.
Did the prosecution prove beyond a reasonable doubt that appellants canvassed, enlisted, contracted and transported the
thirteen persons listed in the information? In examining the prosecutions evidence, we bear in mind that a conviction for
large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three (3) or more persons
whether individually or as a group.22 While the law does not require that at least three (3) victims testify at the trial, it is
necessary that there is sufficient evidence proving that the offense was committed against three (3) or more persons.23
There is no evidence that appellant undertook the recruitment of Mary Jane Cantil and Pacifico Villaver. Neither Cantil nor
Villaver testified in court. No witness testified as to the fact of their recruitment.
As regards Mario Tambacan, his mother Conchita testified that she learned of his recruitment only from other persons. On
direct examination she said:
Q

How did you know that he was recruited?

Many told me.24

On cross-examination, she further revealed:

Q

You claimed that he was recruited but you did not see the recruitment?

This Josephine Clam and a companion recruited my son because many saw them.

ATTY. BAYRON:
That is hearsay.
COURT:
Q
But you, yourself, you did not see that he was recruited? Were you present when Mario Tambacan was
recruited by the accused?
A

I was not present.

You were only informed?

Yes.

Your testimony here that he was recruited was only told to you?

Yes.25

Conchita Tambacans testimony is clearly hearsay and, thus, of little probative value.26 It hardly suffices to prove Mario
Tambacans recruitment beyond reasonable doubt.
We now examine the evidence offered to prove the recruitment of the Collanteses. The prosecutions evidence consists of
the testimonies of Rogelio Collantes and his daughter Christine. Rogelio testified that his wife and children were "recruited"
by appellants, that appellants promised that his wife and children were to be provided free meals and transportation to
Manila and good wages, and that appellants brought his wife and children to Manila.
Q

Do you recall what happen[ed] to Victoria, Cristine and Roger Collantes, Jr., sometime in April, 1993?

They were recruited.

By whom?

Roger Segun and Josephine Clam.

xxx
Q
When you learn[ed] that your wife Victoria, Cristine your daughter and son Roger Segun, Jr., were being
recruited by the accused whom you just identified, what did you do then?
A

I verified about their recruited (sic).

You mean you were to talk to Josephine Clam and Roger Segun?

Yes.

Have you talked to Josephine Clam and Roger Segun?

Yes.

What did they tell you?

They promised that the transportation to Manila will be free and the meals and good wages.

xxx
Q

Were these two accused Roger Segun and Josephine Clam able to bring your wife and children to Manila?

Yes.

Do you know what place in Manila they were taken?

In Cabanatuan City.27

By itself, Rogelios testimony is far from conclusive that appellants actually recruited his wife and children. Rogelio used the
term "recruit" which is a conclusion of law; the prosecution did not elicit from him the specific act constituting the recruitment.
Section 36, Rule 130 of the Rules of Court states that a witness can testify only to those facts which he knows of his
personal knowledge. He is not permitted to testify as to a conclusion of law. Law in the sense here used embraces whatever
conclusions belong properly to the court.28 Thus, it has been held that the bare statements of a rape victim that she was
"sexually assaulted" or "raped" by the accused are not sufficient to establish the accuseds guilt for the crime of rape.29
Testimony constituting conclusions of law has no probative value and is not binding upon the court.30
Rogelio also said that appellants made certain promises but it is not clear if these were made to Rogelio or to his wife and
children. That appellants "brought" them to Manila does not necessarily mean that they were "transported" in the context of
Article 13 (b) for if we subscribe to the defenses account, appellants merely accompanied Rogelios family to Manila. If two
inculpatory facts are capable of two different interpretations, that which would favor the accused should be adopted.31

On the other hand, Christine Collantes testified on direct examination:

Q

Do you recall sometime in April, 1993 what transpired between you and these 2 accused in this case?

They treated me well.

How did it happen that these 2 accused treated you well sometime in April, 1993?

They told us we would be given work.

Where will you be given work?

In Cabanatuan City, sir.

In other words how many were you these 2 accused promised to give you work in Cabanatuan City?

We were 13.

That includes your mother and your brother Rogelio, Jr.?

Yes, sir.

And that includes you also?

Yes.

Did you agree to their proposal that you will be given job in Cabanatuan City if you will go there?

Yes, sir.

How about your mother?

Yes, sir.

How about your brother?

My brother went with my mother.

Q
When you agree[d] with your mother, were you able to go in Cabanatuan City together with the accused as
they promised?
A

Yes, sir.

That includes the others recruited with the total of 13 of you?

Yes, sir.

What means of transportation did you take from here to Manila?

William Lines.

Who shoulder[ed] the expenses of that boat in going there from here?

Josephine Clam and Roger Segun.

When you arrived in Manila you proceeded to Cabanatuan City, is that correct?

Yes.

That includes your mother and your brother?

Yes, sir.

Q
As promised by the accused that you would be given a job, were [you] able to have a job there in Cabanatuan
City?
A

Yes, sir.

What is your work there?

House work.

To whom did you work with?

With Engr. Sy.

How much did he agree as your wages?

P500.00 a month.

Do you know if your mother was able to secure a job as promised by the accused?

Yes.

Was she able to get a job?

Yes.

What kind of job?

House work.

How about your younger brother, was he able to have a work there?

No he is still a child.

COURT
Q

To whom did your mother work?

Mabini Llanera in Cabanatuan City.32

On cross-examination, she related:

Q

Is it not a fact that your mother went to the house of the accused and beg[ged] you to find a job?

Yes, sir.

You also went with your parents when your mother went to the house of the accused?

Yes, sir.

The accused did not offer [a] job for your mother?

She offered.

You went along with your mother to Cabanatuan City, is that correct?

Yes.

Now, will you please tell the court why did you go along with your mother to Cabanatuan City?

In order to work.

Q
The accused did not offer you [a] job but you only went along with your mother to Cabanatuan City, is that
correct?
A

No.

COURT
Q

What do you mean when you say no?

I was forced by my mother to work in Cabanatuan City.33

And on re-cross:
ATTY. BAYRON
Q

The accused did not invite you to go to their house on March 26, 1993, am I correct?

We were invited.

Q
You and your mother went to the house of the accused because you ask[ed] for help to find a job, am I
correct?
FISCAL BALABAGAN
Already answered, Your Honor.
COURT
Answer.
WITNESS
A

We were invited.34

Christines testimony establishes beyond a reasonable doubt that appellants recruited Christines mother Victoria. Christine
explicitly stated that appellants offered her mother a job and told them that they "would be given work." Victoria thus agreed
to appellants "proposal" that she would be given a job in Cabanatuan City.
However, there is reasonable doubt whether appellants actually recruited Christine herself since Christine said that she
"was forced by [her] mother to work in Cabanatuan City."
The Court also entertains grave doubts regarding the alleged recruitment of Christines brother Rogelio, Jr., who, according
to Christine, went with their mother and was not able to work because, at 6, he was "still a child." Did Rogelio, Jr. go to
Cabanatuan City to work or did he just go together with his mother so she could look after him? The former is unlikely while
the latter is not farfetched since the child was too young to work and still needed looking after.

The prosecution, however, succeeded in proving that appellants recruited Loreta Cavan. Loreta testified that appellants told
her that the salary in Cabanatuan City was good, that she agreed to their proposal for her to work there, and that they
brought her to Manila then to Cabanatuan City:
Q

Who brought you to Manila and then Cabanatuan City?

Josephine Clam and Roger Segun.

Why did they bring you to Manila then to Cabanatuan City?

According to them that place is good because the salary is big.

xxx
Q
You said you were brought to Manila by these two accused on March 27, 1993, before that March 27, was
there any occasion that you met the accused in this case?
A

Yes, sir.

Where did you meet them?

In Linamon.

In the house of Mrs. Josephine Clam?

Yes, sir.

What transpired when you first met with the accused Josephine Clam in their house in Linamon?

They told us that in the boat where we are going to take, we are prohibited to go around the boat.

COURT
Q

Prior to that when for the first time you met the accused?

WITNESS
A

At the time when we are recruited.

How did they recruit you?

They told me that the salary in that place is good.

FISCAL BALABAGAN
And because they told you that the salary is good, you are referring to Cabanatuan City?
WITNESS
A

Yes.

When they told you that the salary is good, what did you do?

I am willing to go.

You mean you agreed with their proposal to you and that you are going to work there?

Yes, sir.35

On cross-examination, she said that appellants offered her employment and she went to appellants house because they
were recruiting:
ATTY. BAYRON
Q
You said awhile ago that you went to the house of the accused in Linamon, Lanao del Norte, can you recall
when was that when you went to the house of the accused in this case?
A

March 27.

Did you go to the house of the accused alone or with companion?

I have companions.

Please tell the court why did you go to the house of the accused on March 27, 1993?

Because they have recruited us.

Q
Is it not a fact that you went to the house of the accused in Linamon because you sought their help to find a
job?
A

No, sir.

The accused in this case did not offer you a job?

They offered me.

Is it not a fact that you beg[ged] the accused to help you find a job outside Linamon, Lanao del Norte?

No, sir.

The accused in this case did not invite you to go in their house on March 27, 1993?

No, sir.

You went there on March 27, 1993 on your own volition, am I correct?

Sir, sir.

You are familiar with the house of the accused in Linamon, Lanao del Norte, am I correct?

Yes, sir.

Q
In the house of the accused you can not find any signboard that they are recruiting people for jobs, am I
correct?
A

No, sir.

COURT
Q

What is your purpose in going to the house of the accused?

Because they are recruiting.

Prior to that when you went there, you have not met them before?

No, sir.

Why did you go to the house of the accused and knew that they are recruiting?

I was told by my sister.

Luther is your elder sister?

Yes.36

The prosecution however failed to prove that appellants recruited Loretas sister, Luther. Loreta testified, thus:
Q

How many of you were brought and were recruited by the accused?

We were 13.

Can you mention who were your companions?

The twin brother, Pedro and Pablo.

xxx
Q

Who else?

Luther Caban.

What is your relation with Luther Cavan?

She is my sister.

xxx
FISCAL BALABAGAN
Q
You said that you were recruited together with your sister and others and were brought to Cabanatuan City,
is that correct?
A

Yes, sir.

Who brought you there?

ATTY. BAYRON
Already answered.
COURT
Witness may answer.
WITNESS
A

Josephine Clam and Roger Segun.37

Again, the term "recruit" is a conclusion of law. The prosecution failed to elicit from Loreta how appellants "recruited" Luther.
While Loreta also said that Luther was among the thirteen brought to Manila, it does not necessarily mean that her
transportation was for purposes of employment. Moreover, Loreta said that Luthers job, at least at the time Loreta testified,
was not a result of appellants efforts.
Q

How about your sister Luther, where is she now?

She is in Manila.

Why [is] she is still in Manila until now?

She went there to work.

Who gave her work, were the accused in this case as promised to you?

No, sir.38

These circumstances give rise to doubts whether appellants indeed recruited Luther Cavan.
Neither was the prosecution able to establish that appellants recruited the twins Pedro and Pablo Ozarraga. Josephine
Ozarraga Aba, the twins aunt, testified:
Q

Sometime in March or April, 1993, what happen to these two nephews of yours?

They were recruited by Josephine Clam and Roger Segun.

xxx
Q
You said that these 2 accused were the ones who recruited your 2 nephews sometime in March or April,
1993. When you learn that they were recruited what did you do if any?
A
I went to their house and confronted them about my nephews and they told me that my nephews will be given
free fare to Manila, free meals and good wages and they also promised that to my nephews.
Q
You said they promised your nephews free fare to Manila, free meals and good wages, whom are you referring
they?
A

Josephine Clam and Roger Segun.

Why were Josephine Clam and Roger Segun able to recruit your two nephews?

Because they brought them.

Where did they brought your nephews?

One in Cabanatuan and the other one in Bulacan.39

As we held earlier, "recruit" is a legal conclusion. The witness must testify as to the facts that would prove recruitment. It
does not suffice that the witness simply state that the accused "recruited" the "victim." Hence, the testimony of Josephine
Aba that appellants "recruited" her nephews is, by itself, insufficient to convict appellants for the recruitment of Pedro and
Pablo Ozarraga.
That appellants allegedly told Josephine Aba that her nephews would be given free fare and meals is not inconsistent with
appellants account that they paid for their neighbors expenses. The same holds true for the claim that appellants brought
the twins to Cabanatuan and Bulacan. According to appellants, they accompanied the thirteen persons to help them find
work. The reference to good wages could mean that the rates of compensation in Cabanatuan or Bulacan are relatively
high compared to those in Lanao del Norte. These circumstances do not necessarily mean that appellants recruited Pedro
and Pablo Ozarraga.

We cannot give much credence to Josephines statement that appellants also promised free fare and meals, and good
wages to her nephews since the prosecution did not show that Josephine was present when appellants made this supposed
promise to her nephews.
Neither did the prosecution prove beyond reasonable doubt that appellants recruited Jhonely and Jonard Genemelo.
Melecio Ababa, grandfather of Jhonely and Jonard testified on direct examination:
Q

Do you recall what happen to your 2 grandsons sometime in the month of April, 1993?

They were recruited by Roger Segun and Josephine Clam.

xxx
FISCAL BALABAGAN
Q
When you learn that your grandsons were being recruited by Roger and Segun and Josephine Clam, what
did you do?
A

I went to their house.

You said you went to their house, whose house are your referring?

The house of Roger Segun and Josephine Clam.

xxx
FISCAL BALABAGAN
Q

Who were the people you met inside the house of Josephine Clam?

Them.

Are you referring Roger Segun and Josephine Clam?

Yes.

Then what happen there when you went to the house of the accused?

They promised that the transportation to Manila is free and free meals and good wages.

Q
Because of this free meals and transportation to Manila they promised to your grandsons and you what
happen?
A

They brought them to Cabanatuan City.

Did you agree with this?

Yes, I agree.

You agreed because of this promise of free transportation and good wages for your grandchildren?

Yes.40

On cross-examination, Melecio said:

Q

You only learn from somebody that your grandsons were recruited by the two accused?

From them personally because I went to their house.

You mean the house of your grandson?

I went to the house of the recruiters because they were staying in my house.

When you went to their house your grandsons were not there?

My two grandsons were there.

Can you recall when your two grandsons Johnely and Jonard allegedly recruited by the two accused?

Sometime on the 16 or 17th.

What month?

April.

You were not present when your two grandsons were allegedly recruited by the two accused?

I was there present.41

Note again the use of the term "recruit," a defect present in the testimonies of Rogelio Collantes, Loreta Cavan and
Josephine Aba. While Melecio Aba said that appellants promised his grandsons free transportation and meals, and good
wages, these promises, as we have observed in analyzing Josephine Abas testimony, are not incongruent with appellants
version.
Lastly, Elena Araas testimony on her son Richards alleged recruitment is insufficient to prove appellants guilt. Elena
testified on direct examination:
FISCAL BALABAGAN
Q

Mrs. Elena Araas, do you know Richard Araas?

WITNESS
A

Yes, he is my son.

Where is he now?

In Cabanatuan City brought by Josephine Clam

Do you know what is the family name of Josephine?

Yes, Clam.

When was your son brought by Josephine Clam and Roger Segun?

March 6, that was Saturday.

Do you know the reason why they brought your son in Cabanatuan on March 6, 1993?

Because of the promise that he would be given good salary.

COURT

How do you know that he was promised of a good salary?

Because I went to their house.

FISCAL BALABAGAN
Q

Are you referring to the house of Josephine Clam?

Yes.

Were there people there when you arrived there?

Yes, Josephine Clam, Roger Segun, my son and others.

Did you agree to recruitment that your son will be brought to Cabanatuan City?

Yes.

Why did you agree?

Because of the promise that they would receive good salary.

Did he went there personally?

No.

xxx
FISCAL BALABAGAN
Q

How was your son recruited by the accused in this case?

As they promised that the salary is quite big.42

On cross-examination, Elena said:

Q

You were not present when your son was allegedly recruited by the accused?

I was there.

The accused in this case did not offer to your son but it was your son who asked helped (sic) to find a job?

My son was recruited that he would be given work.

COURT
Q

The 2 accused never approached your son they have work in Cabanatuan City?

Yes, they said that.

ATTY. BAYRON
Q

The accused tell (sic) your son that they will help your son to find a job?

Yes, sir.43

Elenas testimony fails to state the specific act constituting the recruitment. Elena merely declared that her son was
"recruited" a legal conclusion. Appellants also supposedly said that "they have work in Cabanatuan City" and that "they
will help [her] son to find a job." Elena did not state the context and the circumstances under which these statements were
made. Moreover, the statements attributed to appellants are ambiguous and hardly incongruous with appellants claim that
they assisted their neighbors find work, which assistance does not necessarily translate to an act of recruitment. That there
was a supposed promise of a good salary is also ambiguous for, as noted earlier, the reference to good wages could mean
that the rates of compensation in Cabanatuan City are higher compared to those in Lanao del Norte.1wphi1.nt
In sum, the prosecution failed to elicit from many of its witnesses the specific acts constituting the recruitment of the other
alleged victims. The prosecution was able to prove that appellants performed recruitment activities only in the cases of
Victoria Collantes and Loreta Cavan. The third element of illegal recruitment, i.e., that the offender commits the acts of
recruitment against three or more persons is, therefore, absent. Consequently, appellants can be convicted only of two
counts of "simple" illegal recruitment.
WHEREFORE, the Decision of the Regional Trial Court is MODIFIED. Appellants are found GUILTY beyond reasonable
doubt of two counts of illegal recruitment, as defined and punished by Article 38 (a) of the Labor Code, in relation to Articles
13 (b) and 39 thereof. They are each sentenced to suffer for each count imprisonment of four (4) to five (5) years.
SO ORDERED.
Davide, Jr., C.J. and Ynares-Santiago, J., concur.
Puno, J., on official leave.

G.R. No. 152642

November 13, 2012

HON. PATRICIA A. STO.TOMAS, ROSALINDA BALDOZ and LUCITA LAZO, Petitioners,

vs.
REY SALAC, WILLIE D. ESPIRITU, MARIO MONTENEGRO, DODGIE BELONIO, LOLIT SALINEL and BUDDY
BONNEVIE, Respondents.
x-----------------------x
G.R. No. 152710
HON. PATRICIA A. STO. TOMAS, in her capacity as Secretary of Department of Labor and Employment (DOLE),
HON. ROSALINDA D. BALDOZ, in her capacity as Administrator, Philippine Overseas Employment Administration
(POEA), and the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION GOVERNING BOARD, Petitioners,
vs.
HON. JOSE G. PANEDA, in his capacity as the Presiding Judge of Branch 220, Quezon City, ASIAN
RECRUITMENT COUNCIL PHILIPPINE CHAPTER, INC. (ARCOPHIL), for itself and in behalf of its members:
WORLDCARE PHILIPPINES SERVIZO INTERNATIONALE, INC., STEADFAST INTERNATIONAL RECRUITMENT
CORP., VERDANT MANPOWER MOBILIZATION CORP., BRENT OVERSEAS PERSONNEL, INC., ARL MANPOWER
SERVICES, INC., DAHLZEN INTERNATIONAL SERVICES, INC., INTERWORLD PLACEMENT CENTER, INC.,
LAKAS TAO CONTRACT SERVICES LTD. CO., SSC MULTI-SERVICES, DMJ INTERNATIONAL, and MIP
INTERNATIONAL MANPOWER SERVICES, represented by its proprietress, MARCELINA I. PAGSIBIGAN,
Respondents.
x-----------------------x
G.R. No. 167590
REPUBLIC OF THE PHILIPPINES, represented by the HONORABLE EXECUTIVE SECRETARY, the HONORABLE
SECRETARY OF LABOR AND EMPLOYMENT (DOLE), the PHILIPPINE OVERSEAS EMPLOYMENT
ADMINISTRATION (POEA), the OVERSEAS WORKERS WELFARE ADMINISTRATION (OWWA), the LABOR
ARBITERS OF THE NATIONAL LABOR RELATIONS COMMISSION (NLRC), the HONORABLE SECRETARY OF
JUSTICE, the HONORABLE SECRETARY OF FOREIGN AFFAIRS and the COMMISSION ON AUDIT (COA),
Petitioners,
vs.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. (P ASEI), Respondent.
x-----------------------x
G.R. Nos. 182978-79
BECMEN SERVICE EXPORTER AND PROMOTION, INC., Petitioner,
vs.
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of daughter, Jasmin G. Cuaresma), WHITE
FALCON SERVICES, INC., and JAIME ORTIZ (President of White Falcon Services, Inc.), Respondents.
x-----------------------x
G.R. Nos. 184298-99
SPOUSES SIMPLICIO AND MILA CUARESMA (for and in behalf of deceased daughter, Jasmin G. Cuaresma),
Petitioners,
vs.
WHITE FALCON SERVICES, INC. and BECMEN SERVICES EXPORTER AND PROMOTION, INC., Respondents.
DECISION
ABAD, J.:

These consolidated cases pertain to the constitutionality of certain provisions of Republic Act 8042, otherwise known as the
Migrant Workers and Overseas Filipinos Act of 1995.
The Facts and the Case
On June 7, 1995 Congress enacted Republic Act (R.A.) 8042 or the Migrant Workers and Overseas Filipinos Act of 1995
that, for among other purposes, sets the Governments policies on overseas employment and establishes a higher standard
of protection and promotion of the welfare of migrant workers, their families, and overseas Filipinos in distress.
G.R. 152642 and G.R. 152710
(Constitutionality of Sections 29 and 30, R.A. 8042)
Sections 29 and 30 of the Act1 commanded the Department of Labor and Employment (DOLE) to begin deregulating within
one year of its passage the business of handling the recruitment and migration of overseas Filipino workers and phase out
within five years the regulatory functions of the Philippine Overseas Employment Administration (POEA).
On January 8, 2002 respondents Rey Salac, Willie D. Espiritu, Mario Montenegro, Dodgie Belonio, Lolit Salinel, and Buddy
Bonnevie (Salac, et al.) filed a petition for certiorari, prohibition and mandamus with application for temporary restraining
order (TRO) and preliminary injunction against petitioners, the DOLE Secretary, the POEA Administrator, and the Technical
Education and Skills Development Authority (TESDA) Secretary-General before the Regional Trial Court (RTC) of Quezon
City, Branch 96.2
Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10) and POEA Memorandum Circular 15 (POEA
MC 15); 2) prohibit the DOLE, POEA, and TESDA from implementing the same and from further issuing rules and
regulations that would regulate the recruitment and placement of overseas Filipino workers (OFWs); and 3) also enjoin them
to comply with the policy of deregulation mandated under Sections 29 and 30 of Republic Act 8042.
On March 20, 2002 the Quezon City RTC granted Salac, et al.s petition and ordered the government agencies mentioned
to deregulate the recruitment and placement of OFWs.3 The RTC also annulled DOLE DO 10, POEA MC 15, and all other
orders, circulars and issuances that are inconsistent with the policy of deregulation under R.A. 8042.
Prompted by the RTCs above actions, the government officials concerned filed the present petition in G.R. 152642 seeking
to annul the RTCs decision and have the same enjoined pending action on the petition.
On April 17, 2002 the Philippine Association of Service Exporters, Inc. intervened in the case before the Court, claiming that
the RTC March 20, 2002 Decision gravely affected them since it paralyzed the deployment abroad of OFWs and performing
artists. The Confederated Association of Licensed Entertainment Agencies, Incorporated (CALEA) intervened for the same
purpose.4
On May 23, 2002 the Court5 issued a TRO in the case, enjoining the Quezon City RTC, Branch 96, from enforcing its
decision.
In a parallel case, on February 12, 2002 respondents Asian Recruitment Council Philippine Chapter, Inc. and others
(Arcophil, et al.) filed a petition for certiorari and prohibition with application for TRO and preliminary injunction against the
DOLE Secretary, the POEA Administrator, and the TESDA Director-General,6 before the RTC of Quezon City, Branch 220,
to enjoin the latter from implementing the 2002 Rules and Regulations Governing the Recruitment and Employment of
Overseas Workers and to cease and desist from issuing other orders, circulars, and policies that tend to regulate the
recruitment and placement of OFWs in violation of the policy of deregulation provided in Sections 29 and 30 of R.A. 8042.
On March 12, 2002 the Quezon City RTC rendered an Order, granting the petition and enjoining the government agencies
involved from exercising regulatory functions over the recruitment and placement of OFWs. This prompted the DOLE
Secretary, the POEA Administrator, and the TESDA Director-General to file the present action in G.R. 152710. As in G.R.
152642, the Court issued on May 23, 2002 a TRO enjoining the Quezon City RTC, Branch 220 from enforcing its decision.
On December 4, 2008, however, the Republic informed7 the Court that on April 10, 2007 former President Gloria MacapagalArroyo signed into law R.A. 94228 which expressly repealed Sections 29 and 30 of R.A. 8042 and adopted the policy of
close government regulation of the recruitment and deployment of OFWs. R.A. 9422 pertinently provides:

xxxx
SEC. 1. Section 23, paragraph (b.1) of Republic Act No. 8042, otherwise known as the "Migrant Workers and Overseas
Filipinos Act of 1995" is hereby amended to read as follows:
(b.1) Philippine Overseas Employment Administration The Administration shall regulate private sector participation in the
recruitment and overseas placement of workers by setting up a licensing and registration system. It shall also formulate and
implement, in coordination with appropriate entities concerned, when necessary, a system for promoting and monitoring the
overseas employment of Filipino workers taking into consideration their welfare and the domestic manpower requirements.
In addition to its powers and functions, the administration shall inform migrant workers not only of their rights as workers
but also of their rights as human beings, instruct and guide the workers how to assert their rights and provide the available
mechanism to redress violation of their rights.
In the recruitment and placement of workers to service the requirements for trained and competent Filipino workers of
foreign governments and their instrumentalities, and such other employers as public interests may require, the
administration shall deploy only to countries where the Philippines has concluded bilateral labor agreements or
arrangements: Provided, That such countries shall guarantee to protect the rights of Filipino migrant workers; and: Provided,
further, That such countries shall observe and/or comply with the international laws and standards for migrant workers.
SEC. 2. Section 29 of the same law is hereby repealed.
SEC. 3. Section 30 of the same law is also hereby repealed.
xxxx
On August 20, 2009 respondents Salac, et al. told the Court in G.R. 152642 that they agree9 with the Republics view that
the repeal of Sections 29 and 30 of R.A. 8042 renders the issues they raised by their action moot and academic. The Court
has no reason to disagree. Consequently, the two cases, G.R. 152642 and 152710, should be dismissed for being moot
and academic.
G.R. 167590
(Constitutionality of Sections 6, 7, and 9 of R.A. 8042)
On August 21, 1995 respondent Philippine Association of Service Exporters, Inc. (PASEI) filed a petition for declaratory
relief and prohibition with prayer for issuance of TRO and writ of preliminary injunction before the RTC of Manila, seeking
to annul Sections 6, 7, and 9 of R.A. 8042 for being unconstitutional. (PASEI also sought to annul a portion of Section 10
but the Court will take up this point later together with a related case.)
Section 6 defines the crime of "illegal recruitment" and enumerates the acts constituting the same. Section 7 provides the
penalties for prohibited acts. Thus:
SEC. 6. Definition. For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, procuring workers and includes referring, contract services, promising or advertising for
employment abroad, whether for profit or not, when undertaken by a non-license or non-holder of authority contemplated
under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines:
Provided, That such non-license or non-holder, who, in any manner, offers or promises for a fee employment abroad to two
or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any person,
whether a non-licensee, non-holder, licensee or holder of authority:
xxxx
SEC. 7. Penalties.
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than six (6)
years and one (1) day but not more than twelve (12) years and a fine not less than two hundred thousand pesos
(P200,000.00) nor more than five hundred thousand pesos (P500,000.00).

(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos (P500,000.00) nor
more than one million pesos (P1,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage
as defined herein.
Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18)
years of age or committed by a non-licensee or non-holder of authority.10
Finally, Section 9 of R.A. 8042 allowed the filing of criminal actions arising from "illegal recruitment" before the RTC of the
province or city where the offense was committed or where the offended party actually resides at the time of the commission
of the offense.
The RTC of Manila declared Section 6 unconstitutional after hearing on the ground that its definition of "illegal recruitment"
is vague as it fails to distinguish between licensed and non-licensed recruiters11 and for that reason gives undue advantage
to the non-licensed recruiters in violation of the right to equal protection of those that operate with government licenses or
authorities.
But "illegal recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTCs finding, actually makes
a distinction between licensed and non-licensed recruiters. By its terms, persons who engage in "canvassing, enlisting,
contracting, transporting, utilizing, hiring, or procuring workers" without the appropriate government license or authority are
guilty of illegal recruitment whether or not they commit the wrongful acts enumerated in that section. On the other hand,
recruiters who engage in the canvassing, enlisting, etc. of OFWs, although with the appropriate government license or
authority, are guilty of illegal recruitment only if they commit any of the wrongful acts enumerated in Section 6.
The Manila RTC also declared Section 7 unconstitutional on the ground that its sweeping application of the penalties failed
to make any distinction as to the seriousness of the act committed for the application of the penalty imposed on such
violation. As an example, said the trial court, the mere failure to render a report under Section 6(h) or obstructing the
inspection by the Labor Department under Section 6(g) are penalized by imprisonment for six years and one day and a
minimum fine of P200,000.00 but which could unreasonably go even as high as life imprisonment if committed by at least
three persons.
Apparently, the Manila RTC did not agree that the law can impose such grave penalties upon what it believed were specific
acts that were not as condemnable as the others in the lists. But, in fixing uniform penalties for each of the enumerated acts
under Section 6, Congress was within its prerogative to determine what individual acts are equally reprehensible, consistent
with the State policy of according full protection to labor, and deserving of the same penalties. It is not within the power of
the Court to question the wisdom of this kind of choice. Notably, this legislative policy has been further stressed in July 2010
with the enactment of R.A. 1002212 which increased even more the duration of the penalties of imprisonment and the
amounts of fine for the commission of the acts listed under Section 7.
Obviously, in fixing such tough penalties, the law considered the unsettling fact that OFWs must work outside the countrys
borders and beyond its immediate protection. The law must, therefore, make an effort to somehow protect them from
conscienceless individuals within its jurisdiction who, fueled by greed, are willing to ship them out without clear assurance
that their contracted principals would treat such OFWs fairly and humanely.
As the Court held in People v. Ventura,13 the State under its police power "may prescribe such regulations as in its judgment
will secure or tend to secure the general welfare of the people, to protect them against the consequence of ignorance and
incapacity as well as of deception and fraud." Police power is "that inherent and plenary power of the State which enables
it to prohibit all things hurtful to the comfort, safety, and welfare of society."14
The Manila RTC also invalidated Section 9 of R.A. 8042 on the ground that allowing the offended parties to file the criminal
case in their place of residence would negate the general rule on venue of criminal cases which is the place where the crime
or any of its essential elements were committed. Venue, said the RTC, is jurisdictional in penal laws and, allowing the filing
of criminal actions at the place of residence of the offended parties violates their right to due process. Section 9 provides:
SEC. 9. Venue. A criminal action arising from illegal recruitment as defined herein shall be filed with the Regional Trial
Court of the province or city where the offense was committed or where the offended party actually resides at the time of
the commission of the offense: Provided, That the court where the criminal action is first filed shall acquire jurisdiction to the
exclusion of other courts: Provided, however, That the aforestated provisions shall also apply to those criminal actions that
have already been filed in court at the time of the effectivity of this Act.

But there is nothing arbitrary or unconstitutional in Congress fixing an alternative venue for violations of Section 6 of R.A.
8042 that differs from the venue established by the Rules on Criminal Procedure. Indeed, Section 15(a), Rule 110 of the
latter Rules allows exceptions provided by laws. Thus:
SEC. 15. Place where action is to be instituted. (a) Subject to existing laws, the criminal action shall be instituted and tried
in the court of the municipality or territory where the offense was committed or where any of its essential ingredients
occurred. (Emphasis supplied)
xxxx
Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is, consistent with that laws declared policy15
of providing a criminal justice system that protects and serves the best interests of the victims of illegal recruitment.
G.R. 167590, G.R. 182978-79,16 and G.R. 184298-9917
(Constitutionality of Section 10, last sentence of 2nd paragraph)
G.R. 182978-79 and G.R. 184298-99 are consolidated cases. Respondent spouses Simplicio and Mila Cuaresma (the
Cuaresmas) filed a claim for death and insurance benefits and damages against petitioners Becmen Service Exporter and
Promotion, Inc. (Becmen) and White Falcon Services, Inc. (White Falcon) for the death of their daughter Jasmin Cuaresma
while working as staff nurse in Riyadh, Saudi Arabia.
The Labor Arbiter (LA) dismissed the claim on the ground that the Cuaresmas had already received insurance benefits
arising from their daughters death from the Overseas Workers Welfare Administration (OWWA). The LA also gave due
credence to the findings of the Saudi Arabian authorities that Jasmin committed suicide.
On appeal, however, the National Labor Relations Commission (NLRC) found Becmen and White Falcon jointly and
severally liable for Jasmins death and ordered them to pay the Cuaresmas the amount of US$113,000.00 as actual
damages. The NLRC relied on the Cabanatuan City Health Offices autopsy finding that Jasmin died of criminal violence
and rape.
Becmen and White Falcon appealed the NLRC Decision to the Court of Appeals (CA).18 On June 28, 2006 the CA held
Becmen and White Falcon jointly and severally liable with their Saudi Arabian employer for actual damages, with Becmen
having a right of reimbursement from White Falcon. Becmen and White Falcon appealed the CA Decision to this Court.
On April 7, 2009 the Court found Jasmins death not work-related or work-connected since her rape and death did not occur
while she was on duty at the hospital or doing acts incidental to her employment. The Court deleted the award of actual
damages but ruled that Becmens corporate directors and officers are solidarily liable with their company for its failure to
investigate the true nature of her death. Becmen and White Falcon abandoned their legal, moral, and social duty to assist
the Cuaresmas in obtaining justice for their daughter. Consequently, the Court held the foreign employer Rajab and Silsilah,
White Falcon, Becmen, and the latters corporate directors and officers jointly and severally liable to the Cuaresmas for: 1)
P2,500,000.00 as moral damages; 2) P2,500,000.00 as exemplary damages; 3) attorneys fees of 10% of the total monetary
award; and 4) cost of suit.
On July 16, 2009 the corporate directors and officers of Becmen, namely, Eufrocina Gumabay, Elvira Taguiam, Lourdes
Bonifacio and Eddie De Guzman (Gumabay, et al.) filed a motion for leave to Intervene. They questioned the constitutionality
of the last sentence of the second paragraph of Section 10, R.A. 8042 which holds the corporate directors, officers and
partners jointly and solidarily liable with their company for money claims filed by OFWs against their employers and the
recruitment firms. On September 9, 2009 the Court allowed the intervention and admitted Gumabay, et al.s motion for
reconsideration.
The key issue that Gumabay, et al. present is whether or not the 2nd paragraph of Section 10, R.A. 8042, which holds the
corporate directors, officers, and partners of recruitment and placement agencies jointly and solidarily liable for money
claims and damages that may be adjudged against the latter agencies, is unconstitutional.
In G.R. 167590 (the PASEI case), the Quezon City RTC held as unconstitutional the last sentence of the 2nd paragraph of
Section 10 of R.A. 8042. It pointed out that, absent sufficient proof that the corporate officers and directors of the erring
company had knowledge of and allowed the illegal recruitment, making them automatically liable would violate their right to
due process of law.

The pertinent portion of Section 10 provides:

SEC. 10. Money Claims. x x x
The liability of the principal/employer and the recruitment/placement agency for any and all claims under this section shall
be joint and several. This provision shall be incorporated in the contract for overseas employment and shall be a condition
precedent for its approval. The performance bond to be filed by the recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may be awarded to the workers. If the recruitment/placement agency
is a juridical being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and
solidarily liable with the corporation or partnership for the aforesaid claims and damages. (Emphasis supplied)
But the Court has already held, pending adjudication of this case, that the liability of corporate directors and officers is not
automatic. To make them jointly and solidarily liable with their company, there must be a finding that they were remiss in
directing the affairs of that company, such as sponsoring or tolerating the conduct of illegal activities.19 In the case of Becmen
and White Falcon,20 while there is evidence that these companies were at fault in not investigating the cause of Jasmins
death, there is no mention of any evidence in the case against them that intervenors Gumabay, et al., Becmens corporate
officers and directors, were personally involved in their companys particular actions or omissions in Jasmins case.
As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and deployment of OFWs. It aims
to curb, if not eliminate, the injustices and abuses suffered by numerous OFWs seeking to work abroad. The rule is settled
that every statute has in its favor the presumption of constitutionality. The Court cannot inquire into the wisdom or
expediency of the laws enacted by the Legislative Department. Hence, in the absence of a clear and unmistakable case
that the statute is unconstitutional, the Court must uphold its validity.
WHEREFORE, in G.R. 152642 and 152710, the Court DISMISSES the petitions for having become moot and
academic.1wphi1
In G.R. 167590, the Court SETS ASIDE the Decision of the Regional Trial Court ofManila dated December 8, 2004 and
DECLARES Sections 6, 7, and 9 of Republic Act 8042 valid and constitutional.
In G.R. 182978-79 and G.R. 184298-99 as well as in G.R. 167590, the Court HOLDS the last sentence of the second
paragraph of Section 10 of Republic Act 8042 valid and constitutional. The Court, however, RECONSIDERS and SETS
ASIDE the portion of its Decision in G.R. 182978-79 and G.R. 184298-99 that held intervenors Eufrocina Gumabay, Elvira
Taguiam, Lourdes Bonifacio, and Eddie De Guzman jointly and solidarily liable with respondent Becmen Services Exporter
and Promotion, Inc. to spouses Simplicia and Mila Cuaresma for lack of a finding in those cases that such intervenors had
a part in the act or omission imputed to their corporation.
SO ORDERED.
ROBERTO A. ABAD
Associate Justice

G.R. No. 168715

September 15, 2010

MEDLINE MANAGEMENT, INC. and GRECOMAR SHIPPING AGENCY, Petitioners,

vs.
GLICERIA ROSLINDA and ARIEL ROSLINDA, Respondents.
DECISION
DEL CASTILLO, J.:
If a seafarer dies after the termination of his contract of employment, the Court can only commiserate with his heirs because
it has no alternative but to declare that his beneficiaries are not entitled to the death benefits provided in the Philippine
Overseas Employment Administration (POEA) Standard Employment Contract (SEC).
This Petition for Review on Certiorari1 assails the Decision2 dated March 11, 2005 of the Court of Appeals (CA) in CA-G.R.
SP No. 87648, which dismissed the petition for certiorari with prayer for the issuance of a writ of preliminary injunction and/or
restraining order challenging the Resolution dated August 31, 20043 and October 15, 20044 of the National Labor Relations
Commission (NLRC) in NLRC NCR CA No. 040435-04. Also assailed is the Resolution5 dated June 22, 2005 denying the
Motion for Reconsideration.
Factual Antecedents
Petitioner Medline Management, Inc. (MMI), on behalf of its foreign principal, petitioner Grecomar Shipping Agency (GSA),
hired Juliano Roslinda (Juliano) to work on board the vessel MV "Victory." Juliano was previously employed by the
petitioners under two successive separate employment contracts of varying durations. His latest contract was approved by
the POEA on September 9, 1998 for a duration of nine months.6 In accordance with which, he boarded the vessel MV
"Victory" on October 25, 1998 as an oiler and, after several months of extension, was discharged on January 20, 2000.
Months after his repatriation, or on March 6, 2000, Juliano consulted Dr. Pamela R. Lloren (Dr. Lloren) of Metropolitan
Hospital. He complained about abdominal distention which is the medical term for a patient who vomits previously ingested
foods. From March 8 to August 24, 2000, Juliano visited Dr. Lloren for a series of medical treatment.7 In a Medical Certificate8
issued by Dr. Lloren, the condition of Juliano required hemodialysis which was initially done twice a week for a period of
two months and then once every 10 days. In medicine, hemodialysis is the method of removing waste products such as
creatinine and urea, as well as freeing water from the blood, when the kidneys are in renal failure.9
On August 27, 2001, Juliano died. On September 4, 2003, his wife Gliceria Roslinda and son Ariel Roslinda, respondents
herein, filed a complaint against MMI and GSA for payment of death compensation, reimbursement of medical expenses,
damages, and attorney's fees before the Labor Arbitration Branch of the NLRC.
Petitioners received on September 25, 2003 a copy of the summons10 and complaint. Instead of filing an answer, they filed
a Motion to Dismiss11 on the grounds of prescription, lack of jurisdiction and prematurity. Petitioners contended that the
action has already prescribed because it was filed three years, seven months and 22 days from the time the deceased
seafarer reached the point of hire. They also argued that the case should be dismissed outright for prematurity because
respondents failed to comply with a condition precedent by not availing of the grievance machinery. Lastly, petitioners
opined that the Labor Arbiter had no jurisdiction because there exists no employer-employee relationship between the
parties.
On January 9, 2004, respondents submitted their Position Paper with Opposition to Motion to Dismiss.12 On January 26,
2004, petitioners submitted their Comment/Reply with Motion to Expunge Complainant's Position Paper.13
Ruling of the Labor Arbiter
On April 21, 2004, Labor Arbiter Fatima Jambaro-Franco denied the Motion to Dismiss filed by the petitioners. The
dispositive portion provides:
WHEREFORE, premises considered, the Motion to Dismiss is hereby DENIED for lack of merit.
In order to expedite the proceedings of this case, the respondents [herein petitioners] are hereby ordered to submit their
position paper on May 18, 2004 at 9:30 a.m.

SO ORDERED.14
Ruling of the National Labor Relations Commission
Petitioners, instead of complying with the order of the Labor Arbiter to submit their position paper, filed their Notice of Appeal
with Memorandum15 of Appeal on May 7, 2004 with the NLRC.
Petitioners asserted that the Labor Arbiter seriously erred in disregarding the basic provision of the POEA Contract.
According to them, the POEA contract is clear that any claim arising from the employment of a seafarer should be filed
within one year from the seafarer's return to the point of hire; otherwise, it shall be barred forever. In addition, petitioners
claimed that the Labor Arbiter also erred when she issued an order without resolving the other issues in their Motion to
Dismiss. The Labor Arbiter failed to take into consideration that respondents have no employer-employee relationship with
herein petitioners, which means that the former have no cause of action against the latter. Lastly, they opined that the Labor
Arbiter failed to resolve the issue of prematurity when the present case was filed without passing through the grievance
committee.
On August 31, 2004, the NLRC issued its Resolution, the dispositive portion of which provides:
PREMISES CONSIDERED, respondents' appeal from the Order dated April 21, 2004 is hereby DISMISSED for lack of
merit. Let records herein be REMANDED to Arbitration Branch of origin for immediate appropriate proceedings.
SO ORDERED.16
Ruling of the Court of Appeals
After reviewing the case on certiorari, the CA ruled that the claim was filed within the three-year prescriptive period which
must be reckoned from the time of Juliano's death on August 27, 2001 and not from the date of his repatriation on January
20, 2000. As to the denial of the Motion to Dismiss, it found that under Section 3 of Rule V of the NLRC Rules of Procedure,
an order denying the Motion to Dismiss or suspension of its resolution until the final determination of the case, is not
appealable. Anent the issue that the Labor Arbiter had no jurisdiction over the case because there exists no employeeemployer relationship between the parties, the CA held that such matter is a factual issue which should be threshed out in
the trial of the case. Being a factual matter needing evidence for its existence, a motion to dismiss is not the proper remedy.
The dispositive portion of the CA Decision states:
IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED. Costs against the petitioners.
SO ORDERED.17
After the denial by the CA of their Motion for Reconsideration, petitioners filed the present petition for review on certiorari.
Issues
Petitioners raise the following issues:
I.
Whether the CA seriously erred in holding that the Order of the Labor Arbiter dismissing the Motion to Dismiss is not
appealable.
II.
Whether the CA seriously erred in ruling that the claim is not yet barred by
prescription despite the fact that it was filed beyond the one-year prescriptive period provided by the POEA Standard
Employment Contract.

III.
Whether the ruling of the CA is contrary to the jurisprudence laid down in the case of Fem's Elegance Lodging House vs.
Murillo decided by this Court.
Petitioners' Arguments
Petitioners contend that although Rule 1, Section 3 of the NLRC Rules of Procedure provides for the suppletory application
of the Rules of Court, the same is proper only in the absence of applicable provision in the NLRC Rules of Procedure to the
issue at hand. Here, Section 1, Rule VI of the NLRC Rules of Procedure and Article 223 of the Labor Code specifically
provide that any order of the Labor Arbiter is appealable to the NLRC, regardless if it is final or interlocutory in nature.
Hence, there is no room for the suppletory application of the Rules of Court in the case at bench.
Petitioners also argue that the POEA SEC provides that the employer and the seafarer agree that all claims arising from
the contract shall be made within one year from the date of seafarer's return to the point of hire. Hence, respondents claim
for death benefits has clearly prescribed because they filed their complaint before the NLRC Arbitration Branch only on
September 11, 2003 or three years seven months and 22 days after the return of Juliano to the point of hire on January 20,
2000.
Respondents' Arguments
Respondents posit that Section 3, Rule V of the NLRC Rules of Procedure clearly provides that an order denying a motion
to dismiss or suspension of its resolution until the final determination of the case is not appealable. It is for this reason that
petitioners were required to proceed with the Arbitration Branch of origin for further proceedings.
Moreover, respondents argue that the Motion to Dismiss filed by the petitioners was properly denied by the Labor Arbiter
because the cause of action has not yet prescribed. The prescriptive period that should apply is three years and not one
year as provided for in the POEA SEC. Therefore, when the complaint was filed on September 4, 2003, it is well within the
three-year prescriptive period. The reckoning point is the time when the cause of action accrued which is from the time of
death of the seafarer and not from the time of repatriation.
Our Ruling
A close perusal of the three issues presented for our review readily reveals a single issue of substance that the Labor
Arbiter seriously erred in denying the Motion to Dismiss filed by the petitioners without ruling on all the grounds raised by
them. Another issue involved a procedural ground that the CA erred in dismissing the petition assailing the denial of the
Motion to Dismiss based on Section 3, Rule V of the NLRC Rules of Procedure.
The Labor Arbiter Properly Denied the Motion to Dismiss
The denial of the Motion to Dismiss by the Labor Arbiter, the NLRC, and the CA was made in accordance with prevailing
law and jurisprudence. It should be noted that in the Motion to Dismiss filed by the petitioners before the Labor Arbiter, they
cited prescription, lack of jurisdiction and failure to comply with a condition precedent, as the three grounds for dismissal of
the case.
Prescription
The employment contract signed by Juliano stated that "Upon approval, the same shall be deemed an integral part of the
Standard Employment Contract
(SEC) for seafarers."18 Section 28 of the POEA SEC states:
SECTION 28. JURISDICTION
The Philippine Overseas Employment Administration (POEA) or the National Labor Relations Commission (NLRC) shall
have original and exclusive jurisdiction over any and all disputes or controversies arising out of or by virtue of this Contract.

Recognizing the peculiar nature of overseas shipboard employment, the employer and the seafarer agree that all claims
arising from this contract shall be made within one (1) year from the date of the seafarer's return to the point of hire.
(Emphasis supplied)
On the other hand, the Labor Code states:
ART. 291. Money claims. All money claims arising from employer-employee relations accruing during the effectivity of this
Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall forever be barred.
x x x x (Emphasis supplied)
In Southeastern Shipping v. Navarra, Jr.,19 we ruled that "Article 291 is the law governing the prescription of money claims
of seafarers, a class of overseas contract workers. This law prevails over Section 28 of the Standard Employment Contract
for Seafarers which provides for claims to be brought only within one year from the date of the seafarer's return to the point
of hire." We further declared that "for the guidance of all, Section 28 of the Standard Employment Contract for Seafarers,
insofar as it limits the prescriptive period within which the seafarers may file their money claims, is hereby declared null and
void. The applicable provision is Article 291 of the Labor Code, it being more favorable to the seafarers and more in accord
with the State's declared policy to afford full protection to labor. The prescriptive period in the present case is thus three
years from the time the cause of action accrues."
In the present case, the cause of action accrued on August 27, 2001 when Juliano died. Hence, the claim has not yet
prescribed, since the complaint was filed with the arbitration branch of the NLRC on September 4, 2003.
Lack of Jurisdiction
Petitioners claim that the Labor Arbiter has no jurisdiction to hear the case for want of employer-employee relationship
between the parties lacks merit. Petitioners have not taken into consideration that respondents, as heirs of Juliano, have
the personality to file the claim for death benefits. As the parties claiming benefits for the death of a seafarer, they can file
a case with the Labor Arbiter as provided for under Section 28 of the POEA SEC. It is clearly provided therein that the NLRC
shall have original and exclusive jurisdiction over any and all disputes or controversies arising out of or by virtue of the
Contract.
Furthermore, Section 20 of the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-Board
Ocean-Going Vessels states:
A. COMPENSATION AND BENEFITS FOR DEATH
1. In the case of work-related death of the seafarer during the term of his contract, the employer shall pay his beneficiaries
the Philippine Currency equivalent to the amount of Fifty Thousand US dollars (US$ 50,000.00) and an additional amount
of Seven Thousand US Dollars (US$ 7,000.00) to each child under the age of twenty-one (21) but not exceeding four (4)
children, at the exchange rate prevailing during the time of payment.
xxxx
In filing the complaint for payment of death compensation, reimbursement of medical expenses, damages and attorney's
fees before the Labor Arbitration Branch of the NLRC, respondents are actually enforcing their entitlement to the above
provision of the contract of Juliano with petitioners. They are the real parties in interest as they stand to be benefited or
injured by the judgment in this case, or the parties entitled to the avails of the case.
Having shown that respondents have the personality to file the complaint and that the Labor Arbiter has the original and
exclusive jurisdiction over the said claims, then this ground for petitioners' Motion to Dismiss has no basis and, therefore,
its denial was proper.
Failure to Comply with a Condition Precedent
Petitioners likewise contend that the present claim should have been dismissed on the ground that respondents prematurely
filed the present complaint because the employment contract requires respondents to first bring their claim before the
Grievance Machinery.

Indeed, the records of this case would not give us any idea on what actions were taken by respondents before they filed
the case. What can only be deduced from the records is that respondents demanded from petitioners the payment of death
benefits and the reimbursement of medical expenses incurred by Juliano from the time of his repatriation on January 20,
2000 until his death on August 27, 2001 amounting to P149,490.00 which was refused by petitioners. There is therefore no
showing that they complied with the provisions of the employment contract to first bring the matter before the Grievance
Machinery.
Having shown that respondents failed to bring this matter to the Grievance Machinery as provided in the POEA SEC, can
we now conclude that the Labor Arbiter erred in denying the Motion to Dismiss on the ground that respondents failed to
comply with a condition precedent? We answer this in the negative. The denial by the Labor Arbiter of the Motion to Dismiss
filed by petitioners on the ground of non-compliance with a condition precedent is still proper.
Section 4, Rule III of the New Rules of Procedure of the NLRC (As amended by NLRC Resolution No. 01-02, series of 2002)
provides:
SECTION 4. PROHIBITED PLEADINGS AND MOTIONS. The following pleadings, motions or petitions shall not be
allowed in the cases covered by these Rules:
(a) Motion to dismiss the complaint except on the ground of lack of jurisdiction over the subject matter, improper venue, res
adjudicata, prescription and forum shopping;
xxxx
The above provision thus explicitly provides that a motion to dismiss that can be availed of is one which is based on lack of
jurisdiction over the subject matter, improper venue, res judicata, prescription and forum shopping. Conversely, a motion to
dismiss on the ground of failure to comply with a condition precedent is, therefore, a prohibited pleading. Hence, the Labor
Arbiter did not commit any grave abuse of discretion amounting to lack or excess of jurisdiction when she denied the Motion
to Dismiss filed by petitioners.
Having shown that the Labor Arbiter properly denied the Motion to Dismiss, the NLRC and the CA have likewise acted in
accordance with law in denying the appeal of the dismissal of such Motion to Dismiss.
The CA Properly Denied the Petition Based on Section 3, Rule V of the NLRC Rules of Procedure
Petitioners contend that Section 3 (now Section 6), Rule V of the NLRC Rules of Procedure is in direct conflict with the
provisions of Section 1, Rule VI of the same NLRC Rules of Procedure and Article 223 of the Labor Code and, hence, it
should be the latter which should prevail.
We do not agree.
Section 3 (now Section 6) of Rule V and Section 1 of Rule VI of the NLRC Rules of Procedure, as amended, provide:
SECTION 3. MOTION TO DISMISS. On or before the date set for the conference, the respondent may file a motion to
dismiss. Any motion to dismiss on the ground of lack of jurisdiction, improper venue, or that the cause of action is barred by
prior judgment, prescription or forum shopping, shall be immediately resolved by the Labor Arbiter by a written order. An
order denying the motion to dismiss or suspending its resolution until the final determination of the case is not appealable.
SECTION 1. PERIODS OF APPEAL. Decisions, resolutions or orders of the Labor Arbiter shall be final and executory
unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions,
resolutions or orders of the Labor Arbiter and in case of a decision of the Regional Director within five (5) calendar days
from receipt of such decisions, resolutions, or orders. If the 10th or 5th day, as the case may be, falls on a Saturday, Sunday
or a holiday, the last day to perfect the appeal shall be the next working day.
Another provision cited by petitioners is Article 223 of the Labor Code which states:
ART. 223. Appeal. Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the
Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such
appeal may be entertained only on any of the following grounds:

xxxx
However, all the three provisions above-mentioned refer to final orders and not interlocutory ones, such as, a denial of a
motion to dismiss. Based on the above provisions, the Labor Arbiter's decisions, resolutions or orders shall be final and
executory unless appealed to the Commission. Only a final order can attain the final and executory stage; an interlocutory
order cannot go that far. Consequently, when the law says that the orders appealable to the Commission are those which
will become final and executory if not appealed, it can only refer to a final order, not an interlocutory order, such as a denial
of a motion to dismiss.
There is no conflict between the above provisions. The CA therefore correctly dismissed the petition assailing the denial of
the Motion to Dismiss based on Section 3 (now Section 6), Rule V of the NLRC Rules of Procedure because it involved an
interlocutory order. Admittedly, the order denying a Motion to Dismiss is an interlocutory order because it still requires a
party to perform certain acts leading to the final adjudication of a case.
Lastly, petitioners' reliance in FEM's Elegance Lodging House v. Murillo20 to justify their position that an interlocutory order
like the denial of their Motion to Dismiss can be appealed is misplaced. The CA properly addressed this issue in this wise:
Reliance in the case of FEM's Elegance vs. Murillo is misdirected. In that case, the Labor Arbiter's denial was appealed
directly to the Supreme Court and did not pass the Court of Appeals. In ruling that orders of the Labor Arbiter shall be
appealable to the Court of Appeals, the High Court, to Our mind, was simply saying that you cannot go and seek review
directly from the Labor Arbiter to the Supreme Court. One has to pass first the NLRC.21
For Expediency, this Court can Decide the Merits of this Case
This Court is aware that in this case, since the petition is denied, the normal procedure is for it to remand the case to the
Labor Arbiter for further proceedings. "However, when there is enough basis on which the Court may render a proper
evaluation of the merits of petitioners case, x x x the Court may dispense with the time[-]consuming procedure in order to
prevent further delays in the disposition of the case."22 Indeed, remand of the case to the Labor Arbiter for further reception
of evidence is not conducive to the speedy administration of justice and it becomes unnecessary where the Court is in a
position to resolve the dispute based on the records before it. Briefly stated, a remand of the instant case to the Labor
Arbiter would serve no purpose save to further delay its disposition contrary to the spirit of fair play.
"It is an accepted precept of procedural law that the Court may resolve the dispute in a single proceeding, instead of
remanding the case to the lower court for further proceedings if, based on the records, pleadings, and other evidence, the
matter can readily be ruled upon."23 Instead of remanding the case to the Labor Arbiter for further proceedings, we will
resolve the dispute to serve the ends of justice.1avvphi1
The complete records of this case have already been elevated to this Court. The pleadings on record will fully support this
adjudication.
Respondents are not Entitled to the Death Benefits Provided Under the POEA Standard Employment Contract
In Southeastern Shipping v. Navarra, Jr.,24 we declared that "in order to avail of death benefits, the death of the employee
should occur during the effectivity of the employment contract." "The death of a seaman during the term of employment
makes the employer liable to his heirs for death compensation benefits. Once it is established that the seaman died during
the effectivity of his employment contract, the employer is liable."25
Juliano did not die while he was under the employ of petitioners. His contract of employment ceased when he was
discharged on January 20, 2000, after having completed his contract thereat. He died on August 27, 2001 or one year,
seven months and seven days after the expiration of his contract. Thus, his beneficiaries are not entitled to the death
benefits under the Standard Employment Contract for Seafarers.
Moreover, there is no evidence to show that Julianos illness was acquired during the term of his employment with
petitioners. In respondents Position Paper,26 they admitted that Juliano was discharged not because of any illness but due
to the expiration of his employment contract.27 Although they stated that Juliano was hospitalized on August 28, 1999, or
five months before his contract expired, they presented no proof to support this allegation. Instead, what respondents
presented were the Medical Certificates28 issued by Dr. Lloren attesting to the fact that on March 6, 2000, Juliano consulted
her complaining of abdominal distention. We find this not substantial evidence to prove that Julianos illness which caused
his death was contracted during the term of his contract.29 "Indeed, the death of a seaman several months after his
repatriation for illness does not necessarily mean that: a) the seaman died of the same illness; b) his working conditions

increased the risk of contracting the illness which caused his death; and c) the death is compensable, unless there is some
reasonable basis to support otherwise."30 In the instant case, Juliano was repatriated not because of any illness but because
his contract of employment expired. There is likewise no proof that he contracted his illness during the term of his
employment or that his working conditions increased the risk of contracting the illness which caused his death.
"While the Court adheres to the principle of liberality in favor of the seafarer in construing the Standard Employment
Contract, we cannot allow claims for compensation based on surmises. When the evidence presented negates
compensability, this Court has no choice but to deny the claim, lest we cause injustice to the employer."31
WHEREFORE, the instant petition for review on certiorari is DENIED.
We hereby declare that the claim for death benefits of respondents Gliceria Roslinda and Ariel Roslinda has not yet
prescribed but petitioners are not liable to pay to respondents death compensation benefits under the Standard Employment
Contract for Seafarers considering that Juliano's death occurred after the effectivity of his contract. The Labor Arbiter is
therefore DIRECTED to dismiss the complaint filed by herein respondents against the petitioners for payment of death
compensation, reimbursement of medical expenses, damages and attorneys fees.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

G.R. No. 171282

November 27, 2013

SKM ART CRAFT CORPORATION, Petitioner,

vs.
EFREN BAUCA, PATRICIO OLMILLA ZALDY ESCALARES, PEDRITO OLMILLA PEDRO BERAY, DANILO SOLDE,
NOEL P ALARCA, JULIUS CESAR MIGUELA, OCTAVIO OBIAS, ARVIN ABINES, RADDY TERENCIO FE RANIDO,
EDNAMANSUETO SANDRO RODRIGUEZ RENATO TANGO, HERMOGENES OBIAS, DOMINGO LAROCO DANTE
AQUINO, ARMANDO VILLA, ROGELIO DELOS REYES, NOMER MANAGO, ANTONIO BALUDCAL and LUDIVICO
STA. CLARA, Respondents.
x-----------------------x
SKM ART CRAFT CORPORATION, Petitioner,
vs.
EFREN BAUCA PATRICIO OLMILLA ZALDY ESCALARES PEDRITO OLMILLA PEDRO BERAY, DANILO SOLDE,
NOEL PALARCA, JULIUS CESAR MIGUELA, OCTAVIO OBIAS, ARVIN ABINES, RADDY TERENCIO, FE RANIDO,
EDNA MANSUETO, SANDRO RODRIGUEZ, RENATO TANGO, HERMOGENES OBIAS, DOMINGO LAROCO, DANTE
AQUINO, ARMANDO VILLA and ROGELIO DELOS REYES, Respondents.
DECISION
VILLARAMA, JR., J.:
For our resolution is the petition for review on certiorari in G.R. No. 171282 which assails the November 9, 2005 Decision1
and January 24, 2006 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 76670. The petition was earlier
consolidated with the petition docketed as G.R. No. 183484, but said petition was denied on October 10, 2011 and said
denial has become final on January 25, 2012, per the entry of judgment3 in G.R. No. 183484.
The facts of the case follow:
The 23 respondents in G.R. No. 171282 were employed by petitioner SKM Art Craft Corporation which is engaged in the
handicraft business. On April 18, 2000, around 1:12 a.m., a fire occurred at the inspection and receiving/repair/packing area
of petitioners premises in Intramuros, Manila. The fire investigation report4 stated that the structure and the beach rubber
building were totally damaged. Also burned were four container vans and a trailer truck. The estimated damage was P22
million.
On May 8, 2000, petitioner informed respondents that it will suspend its operations for six months, effective May 9, 2000.5
On May 16, 2000, only eight days after receiving notice of the suspension of petitioners operations, the 23 respondents
(and other co-workers) filed a complaint for illegal dismissal, docketed as NLRC NCR (South) Case No. 30-05-03012-00,
30-05-03028-00 and 30-05-03045-00. They alleged that there was discrimination in choosing the workers to be laid off and
that petitioner had discovered that most of them were members of a newly-organized union.6
Petitioner denied the claim of illegal dismissal and said that Article 2867 of the Labor Code allows the bona fide suspension
of a business or undertaking for a period not exceeding six months. Petitioner claimed that the fire cost it millions in losses
and that it is impossible to resume its normal operations for a significant period of time.8
In her Decision9 dated June 29, 2001, the Labor Arbiter ruled that respondents were illegally dismissed and ordered
petitioner to reinstate them and pay them back wages of P59,918.41 each, the amount being subject to further computation
up to the date of their actual reinstatement. The Labor Arbiter ruled that the fire that burned a part of petitioners premises
may validate the suspension of respondents employment, but the suspension must not exceed six months. Since petitioner
failed to recall respondents after the lapse of six months, the Labor Arbiter held that respondents were illegally dismissed.
The fallo of the Labor Arbiters Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of [respondents] Efren Bauca,
Patricio Olmilla, Zaldy Escalares, Gaudencio Gutierrez, Pedrito lmilla, Pedro Beray, Edwin Penasa, Danilo Solde, Noel
Palarca, Julius [Cesar] Miguela, Raul Baray, Octavio Obias, Marcelo Balbuena, Arvin Abines, Raddy O. [Terencio], Fe
Ranido, Edna Mansueto, Ludivico Sta. Clara, Sandro Rodriguez, Antonio Baludcal, Nomer Manago, Renato Tango,
Hermogenes [Obias], Domingo Laroco, [Wenceslao] Ranido, Dante Aquino, Armando Villa, Ramir Sevilla and Danili Portes,

Rogelio [delos] Reyes, Luciano T. Obias, illegal and ordering the [petitioner] SKM Art Craft Corp[oration] to reinstate them
to their former position without loss of seniority rights and privileges and to pay the following amount representing back
wages.
xxxx
1) Basic:
x x x x 54,498.73
2) 13th Month Pay: x x x 4,541.56
3) Service Incentive Leave Pay: x x x 878.12
TOTAL BACK WAGES P59,918.41
The amount of back wages shall be subject to further computation up to the date of their actual reinstatement.
The [complaint as to] Gaudencio Gutierrez, Danilo Portes, Wenceslao Ranido, Lucino Obias, Edwin Penaso, Marcelo
Balbuena, Raul Beray, Ramir Sevilla [is] dismissed with prejudice in view of the execution of their Release, Waiver and
Quitclaim[s].
SO ORDERED.10
The National Labor Relations Commission (NLRC) set aside the Labor Arbiters Decision and ruled that there was no illegal
dismissal. The NLRC ordered that respondents be reinstated to their former positions but it deleted the award of back
wages. The NLRC noted that the fire caused millions in damages to petitioner. Thus, petitioners suspension of operations
is valid under Article 286 of the Labor Code. It was not meant to remove respondents because they were union members.
The NLRC added that the illegal dismissal complaint filed by respondents was premature for it was filed during the sixmonth period of suspension of operations. The fallo of the NLRCs Decision11 dated July 30, 2002 reads:
WHEREFORE, premises considered, the assailed decision of the Labor Arbiter is hereby SET ASIDE and a new judgment
is hereby rendered ordering the reinstatement of [respondents] to their former xxx positions without payment of backwages.
If reinstatement is no longer feasible for reasons already stated herein, [petitioner is] hereby ordered to pay the remaining
[respondents] with the exclusion of all those who have already executed quitclaims and releases, the equivalent of one
month pay for every year of service, a fraction of at least six months being considered as one whole year.
The [complaint as to] Nomer Manago, Ludivico Sta. Clara and Antonio Baludcud are dismissed [as said complainants have
already] executed quitclaims and releases.
The award of proportionate 13th month pay is hereby GRANTED while the award of service incentive leave pay is
DISMISSED for lack of basis.
SO ORDERED.12
The NLRC denied the parties motions for reconsideration in its Resolution dated January 27, 2003.13
In the assailed Decision, the CA set aside the NLRC Decision and Resolution and reinstated the Labor Arbiters Decision.
The CA considered the merits of the petition for certiorari filed by respondents and the conflicting findings of the Labor
Arbiter and the NLRC as justification for its decision to decide the case on the merits even if only nine of the respondents
had signed the verification and certification against forum shopping attached to the petition.
The CA ruled that petitioner failed to prove that its suspension of operations is bona fide . The CA noted that the proof of
alleged losses the list of items and materials allegedly burned was not even certified or signed by petitioners accountant
or comptroller. And even if the suspension of operations is considered bona fide, the CA said that respondents were not
reinstated after six months. Thus, respondents are deemed to have been illegally dismissed. The CA also noted that
petitioners manifestation that it is willing to admit the respondents if they return to work was belatedly made after almost
one year from the expiration of the suspension of operations.

The CA also held that the NLRC committed grave abuse of discretion in dismissing the complaints of Nomer Manago,
Ludivico Sta. Clara and Antonio Baludcal since the Release, Waiver and Quitclaims executed by them pertain to another
case, NLRC-NCR Case No. 00-02-01495. In fact, their quitclaims were executed on July 28, 1999 or long before the fire
occurred on April 18, 2000. The fallo of the assailed CA Decision reads:
WHEREFORE, premises considered, the Petition is GRANTED. The Decision dated 30 July 2002 and Resolution dated 27
January 2003 of the NLRC (Second Division) in NLRC NCR 30-05-03012-00 (CA No. 029182-01) are REVERSED and SET
ASIDE and the Decision dated 29 June 2001 of Labor Arbiter Dolores M. Peralta-Beley is hereby REINSTATED. Costs
against [petitioner].
SO ORDERED.14
In the assailed Resolution, the CA denied petitioners motion for reconsideration.
Petitioner in G.R. No. 171282 raised the following issues:
I.
Whether the CA gravely erred in not summarily dismissing the [CA] petition insofar as xxx Patricio Olmilla [et al., or those
who did not sign the verification and certification against forum shopping,] are concerned.
II.
Whether the CA gravely erred in invalidating the quitclaims executed by Nomer Manago, Ludivico Sta. Clara and Antonio
Baludcal.
III.
Whether the CA gravely erred in not dismissing the claims of Edna Mansueto, Rogelio Delos Reyes, Pedro Beray and
Raddy Terencio, as they have already executed valid quitclaims in favor of the petitioner.
IV.
Whether the CA gravely erred in reversing and setting aside the [NLRC Decision and Resolution] and in reinstating the
Decision of [the Labor Arbiter.]15
We will address first the first two issues raised by petitioner. Then, we will resolve the conflicting rulings on the issue of
illegal dismissal and the quitclaims executed by almost all of the respondents.
On the first issue, we disagree with petitioner that the CA erred in giving due course to the petition filed by respondents
even if only nine of them signed the verification and certification against forum shopping.16 We hold that the verification
signed by nine of the respondents substantially complied with the verification requirement since respondents share a
common interest and cause of action in the case. The apparent merit of respondents CA petition and the conflicting findings
of the Labor Arbiter and the NLRC also justified the CAs decision to rule on the merits of the case.
The CA aptly noted that in Torres v. Specialized Packaging Development Corporation,17 only two of the 25 petitioners
therein signed the verification and certification against forum shopping. We said that the problem is not the lack of a
verification, but the adequacy of one executed by only two of the 25 petitioners. These two signatories, we added, are
unquestionably real parties in interest, who undoubtedly have sufficient knowledge and belief to swear to the truth of the
allegations in the petition. This verification is enough assurance that the matters alleged therein have been made in good
faith or are true and correct, not merely speculative. Hence, we ruled that the requirement of verification was substantially
complied with. In Altres v. Empleo,18 we also ruled that the verification requirement is deemed substantially complied with
when one who has ample knowledge to swear to the truth of the allegations in the complaint or petition signs the verification,
and when matters alleged in the petition have been made in good faith or are true and correct, as in this case.
In Altres, we likewise stated the general rule that the certification against forum shopping must be signed by all the plaintiffs
or petitioners in a case; otherwise, those who did not sign will be dropped as parties to the case. We also said, however,
that under reasonable or justifiable circumstances, as when all the plaintiffs or petitioners share a common interest and
invoke a common cause of action or defense, as in this case, the signature of only one of them in the certification against

forum shopping substantially complies with the certification requirement.19 In Torres, we also considered the apparent
merits of the case as a special circumstance or compelling reason for allowing the petition. We noted the conflicting findings
of the NLRC and the Labor Arbiter and held this as ample justification for the CAs review of the merits. We stressed that
rules of procedure are established to secure substantial justice. Being instruments of the speedy and efficient administration
of justice, they must be used to achieve such end, not to derail it. Technical requirements may thus be dispensed with in
meritorious appeals.20
On the second issue, we likewise disagree with petitioner. The CA properly rejected the Release, Waiver and Quitclaims21
executed by Nomer Manago, Ludivico Sta. Clara and Antonio Baludcal. Said quitclaims are irrelevant to this case for they
pertain to another case, NLRC-NCR Case No. 00-02-01495-99, and were executed on July 28, 1999, long before the fire
occurred on April 18, 2000.
On the issue of illegal dismissal, while we agree with the NLRC that the suspension of petitioners operation is valid, the
Labor Arbiter and the CA are correct that respondents were illegally dismissed since they were not recalled after six months,
after the bona fide suspension of petitioners operations.
It is admitted that petitioners premises was burned on April 18, 2000.22 Petitioner also submitted pictures23 of its premises
after the fire, the certification24 by the Barangay Chairman that petitioners factory was burned, and the fire investigation
report25 of the Bureau of Fire Protection. To prove the damages, petitioner submitted a list26 of burned machines, its
inventory27 for April 2000 and the fire investigation report which stated that the estimated damage is P22 million.
We therefore agree with the NLRC that petitioners suspension of operations is valid because the fire caused substantial
losses to petitioner and damaged its factory. On this point, we disagree with the CA that petitioner failed to prove that its
suspension of operations is bona fide. The list of materials burned was not the only evidence submitted by petitioner. It was
corroborated by pictures and the fire investigation report, and they constitute substantial evidence of petitioners losses.
Under Article 286 of the Labor Code, the bona fide suspension of the operations of a business or undertaking for a period
not exceeding six months shall not terminate employment. Article 286 provides,
ART. 286. When employment not deemed terminated. The bona fide suspension of the operations of a business or
undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not
terminate employment.
In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he
indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or
from his relief from the military or civic duty.
The NLRC correctly noted that the complaint for illegal dismissal filed by respondents was premature since it was filed only
eight days after petitioner announced that it will suspend its operations for six months. In Nippon Housing Phil., Inc. v.
Leynes,28 we said that a complaint for illegal dismissal filed prior to the lapse of said six months is generally considered as
prematurely filed.
In this case, however, we agree with the Labor Arbiter and the CA that respondents were already considered illegally
dismissed since petitioner failed to recall them after six months, when its bona fide suspension of operations lapsed. We
stress that under Article 286 of the Labor Code, the employment will not be deemed terminated if the bona fide suspension
of operations does not exceed six months. But if the suspension of operations exceeds six months, the employment will be
considered terminated. In Valdez v. NLRC,29 we explained:
Under Article 286 of the Labor Code, the bona fide suspension of the operation of a business or undertaking for a period
not exceeding six months shall not terminate employment. Consequently, when the bona fide suspension of the operation
of a business or undertaking exceeds six months, then the employment of the employee shall be deemed terminated. By
the same token and applying said rule by analogy, if the employee was forced to remain without work or assignment for a
period exceeding six months, then he is in effect constructively dismissed.
In Waterfront Cebu City Hotel v. Jimenez,30 we also said:
Under Art. 286 of the Labor Code, a bona fide suspension of business operations for not more than six (6) months does not
terminate employment. After six (6) months, the employee may be recalled to work or be permanently laid off. In this case,
more than six (6) months have elapsed from the time the Club ceased to operate. Hence, respondents termination became
permanent.

Indeed, petitioners manifestation31 dated October 2, 2001 that it is willing to admit respondents if they return to work was
belatedly made, almost one year after petitioners suspension of operations expired in November 2000. We find that
petitioner no longer recalled, nor wanted to recall, respondents after six months.
Petitioner claims now that despite its liberality and gesture of goodwill, none of the respondents reported for work, and that
aside from respondents self-serving claims made in the form of manifestations filed before the Labor Arbiter, nothing on
record will show that respondents actually presented themselves to petitioner for reinstatement.32
We seriously doubt petitioners liberality or goodwill. In its manifestation, petitioner even opposed the motion filed by
respondents for execution of the reinstatement aspect of the Labor Arbiters Decision, to wit:
1. [Petitioner] vehemently opposes the Motion for Execution on the Reinstatement Aspect filed by [respondents].33
And when the Labor Arbiter granted the motion for execution of the reinstatement aspect of her decision, petitioner filed a
manifestation and motion to quash the writ of execution.34 In this motion to quash, petitioner claimed that none of the
respondents indicated their desire to return to work either through the office of the Labor Arbiter or through their counsel,
by filing the appropriate notice or manifestation.35 Notably, petitioner wanted the Labor Arbiter to believe that no
manifestation was filed by respondents. But now, petitioner admits that manifestations were in fact filed by respondents
before the Labor Arbiter. Petitioners lack of candor to the Labor Arbiter is unfair. Petitioners declaration that it is willing to
reinstate respondents also lacks credence because it was in fact opposing such reinstatement.
Now, petitioner and almost all of the respondents have agreed to settle this case. To recall our February 27, 2012
Resolution,36 17 of the 23 respondents have opted to settle the case, to wit:
For the reasons explained below, we deny petitioners prayer in its manifestation and motion for clarification dated January
20, 2012 that we consider these petitions closed and terminated in view of the amicable settlement entered into by all the
parties.
As regards G.R. No. 171282, there are 23 named respondents but only 17 of them, based on our records, have opted to
settle the case. In this case, we received a manifestation and motion dated January 16, 2007 filed by Esguerra and Blanco
Law Office as counsel for petitioner and Atty. Lily S. Dayaon-Ireno as counsel for respondents. Counsels stated that
petitioner and 15 respondents have arrived at a compromise agreement and that the 15 respondents have executed a
Release, Waiver and Quitclaim. Counsels named these 15 respondents as: (1) Efren Bauca, (2) Noel Palarca, (3) Patricio
Olmilla, (4) Pedrito Olmilla, (5) Zaldy Escalares, (6) Danilo Solde, (7) Julius [Cesar] Miguela, (8) Fe R. Ranido-Miguela, (9)
Hermogenes T. Obias, (10) Antonio Baludcal, (11) Renato Tango, (12) Armando Villa, (13) Arvin Abines, (14) the heirs of
Ludivico Sta. Clara, and (15) Octavio T. Obias. Another manifestation and motion dated June 13, 2007 was later filed
involving respondent Dante Aquino. Thus, in our Resolution dated September 19, 2007 in G.R. No. 171282, we granted the
two motions that the petition be dismissed insofar as the aforenamed 16 respondents are concerned. On October 11, 2011,
we also considered these cases (G.R. No. 171282 and G.R. No. 183484) closed and terminated as to respondent Sandro
Rodriguez who executed his own Release, Waiver and Quitclaim. Nonetheless, nothing prevents petitioner from
withdrawing its own petition if it is convinced that it has settled its dispute with all 23 respondents. If it decides to do so, we
can consider the petition withdrawn. And if it turns out that some of the 23 respondents have not agreed to settle this case,
then they can have succor from the favorable judgment of the Court of Appeals.37
In our Resolution dated January 7, 2013,38 we noted that petitioner did not file a motion to withdraw the petition in G.R. No.
171282. Hence, we said that our doubt remains regarding the claim that all 23 respondents have entered into an amicable
settlement with petitioner. We repeated that nothing prevents petitioner from withdrawing its petition in G.R. No. 171282 if
it is convinced that it has settled its dispute with all the respondents. We added that if it decides to do so, we will willingly
consider the petition withdrawn for then our action will not prejudice any respondent. Nonetheless, we gave the parties a
chance to prove the claim. Thus, we suspended for 90 days the period to file the parties memoranda, to wit:
WHEREFORE, we DENY the prayer in the joint manifestation and motion dated September 24, 2012 that we consider the
petition in G.R. No. 171282 closed and terminated, without prejudice to the filing by petitioner of an appropriate motion to
withdraw its petition in G.R. No. 171282, or to the submission of verified admissions by all the 23 respondents in G.R. No.
171282 that they have entered into a settlement agreement with the petitioner or of original copies of their Release, Waiver
and Quitclaim.
Accordingly, the period to file the parties memoranda in G.R. No. 171282 is SUSPENDED for 90 days only, counted from
receipt of this Resolution.39

Still, no motion to withdraw the petition in G.R. No. 171282 was filed. Nor did we receive the verified admissions by the 23
respondents that they have entered into a settlement agreement with petitioner, or the original copies of their Release,
Waiver and Quitclaims.
On October 23, 2013, we dispensed with the filing of the parties memoranda and considered the case submitted for
resolution.
On the issue of validity of the Release, Waiver and Quitclaims signed by Edna Mansueto, Rogelio delos Reyes, Pedro
Beray and Raddy O. Terencio, we note that the CA did not rule on the validity of their quitclaims. While no original copies
of their quitclaims were submitted to us despite our Resolution dated January 7, 2013, the copies40 attached to the petition
are not disowned by respondents. And copies of the identification cards of Mansueto, delos Reyes, Beray and Terencio are
attached to these quitclaims which were subscribed and sworn to before NLRC Commissioner Raul T. Aquino. To our mind,
they have signed these quitclaims voluntarily and we affirm their validity.
In sum, while we agree with the CA in setting aside the NLRC Decision and Resolution and in reinstating the Labor Arbiter
s Decision, the CA and Labor Arbiter s Decisions will now be subject to the settlement agreements entered into by petitioner
and almost all of the respondents.
WHEREFORE, we DENY the petition in G.R. No. 171282 and AFFIRM the Decision dated November 9, 2005 and
Resolution dated January 24, 2006 of the Court of Appeals in CA-G.R. SP No. 76670, subject to the settlement agreements
and quitclaims signed by almost all of the respondents.
No pronouncement as to costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice

G.R. No. 192394

July 3, 2013

ROY D. P ASOS, Petitioner,

vs.
PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, Respondent.
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing
the March 26, 2010 Decision1 and May 26, 2010 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 107805. The
appellate court had affirmed the Decision3 of the National Labor Relations Commission (NLRC) dismissing the illegal
dismissal complaint filed by petitioner Roy D. Pasos against respondent Philippine National Construction Corporation
(PNCC).
The antecedent facts follow:
Petitioner Roy D. Pasos started working for respondent PNCC on April 26, 1996. Based on the PNCC's "Personnel Action
Form Appointment for Project Employment" dated April 30, 1996,4 petitioner was designated as "Clerk II (Accounting)" and
was assigned to the "NAIA II Project." It was likewise stated therein:
PARTICULARS: Project employment starting on April 26, 1996 to July 25, 1996. This contract maybe terminated at anytime
for cause as provided for by law and/or existing Company Policy. This maybe terminated if services are unsatisfactory, or
when it shall no longer needed, as determined by the Company. If services are still needed beyond the validity of this
contract, the Company shall extend your services. After services are terminated, the employee shall be under no obligation
to re-employ with the Company nor shall the Company be obliged to re-employ the employee.5 (Emphasis supplied.)
Petitioners employment, however, did not end on July 25, 1996 but was extended until August 4, 1998, or more than two
years later, based on the "Personnel Action Form Project Employment" dated July 7, 1998.6
Based on PNCCs "Appointment for Project Employment" dated November 11, 1998,7 petitioner was rehired on even date
as "Accounting Clerk (Reliever)" and assigned to the "PCSO Q.I. Project." It was stated therein that his employment shall
end on February 11, 1999 and may be terminated for cause or in accordance with the provisions of Article 282 of the Labor
Code, as amended. However, said employment did not actually end on February 11, 1999 but was extended until February
19, 1999 based on the "Personnel Action Form-Project Employment" dated February 17, 1999.8
On February 23, 1999, petitioner was again hired by PNCC as "Accounting Clerk" and was assigned to the "SM-Project"
based on the "Appointment for Project Employment" dated February 18, 1999.9 It did not specify the date when his
employment will end but it was stated therein that it will be "co-terminus with the completion of the project." Said employment
supposedly ended on August 19, 1999 per "Personnel Action Form Project Employment" dated August 18, 1999,10 where
it was stated, "termination of petitioners project employment due to completion of assigned phase/stage of work or project
effective at the close of office hours on 19 August 1999." However, it appears that said employment was extended per
"Appointment for Project employment" dated August 20, 199911 as petitioner was again appointed as "Accounting Clerk" for
"SM Project (Package II)." It did not state a specific date up to when his extended employment will be, but it provided that it
will be "co-terminus with the x x x project." In "Personnel Action Form Project Employment" dated October 17, 2000,12 it
appears that such extension would eventually end on October 19, 2000.
Despite the termination of his employment on October 19, 2000, petitioner claims that his superior instructed him to report
for work the following day, intimating to him that he will again be employed for the succeeding SM projects. For purposes
of reemployment, he then underwent a medical examination which allegedly revealed that he had pneumonitis. Petitioner
was advised by PNCCs physician, Dr. Arthur C. Obena, to take a 14-day sick leave.
On November 27, 2000, after serving his sick leave, petitioner claims that he was again referred for medical examination
where it was revealed that he contracted Kochs disease. He was then required to take a 60-day leave of absence.13 The
following day, he submitted his application for sick leave but PNCCs Project Personnel Officer, Mr. R.S. Sanchez, told him
that he was not entitled to sick leave because he was not a regular employee.

Petitioner still served a 60-day sick leave and underwent another medical examination on February 16, 2001. He was then
given a clean bill of health and was given a medical clearance by Dr. Obena that he was fit to work.
Petitioner claims that after he presented his medical clearance to the Project Personnel Officer on even date, he was
informed that his services were already terminated on October 19, 2000 and he was already replaced due to expiration of
his contract. This prompted petitioner on February 18, 2003 to file a complaint14 for illegal dismissal against PNCC with a
prayer for reinstatement and back wages. He argued that he is deemed a regular employee of PNCC due to his prolonged
employment as a project employee as well as the failure on the part of PNCC to report his termination every time a project
is completed. He further contended that his termination without the benefit of an administrative investigation was tantamount
to an illegal dismissal.
PNCC countered that petitioner was hired as a project employee in several projects with specific dates of engagement and
termination and had full knowledge and consent that his appointment was only for the duration of each project. It further
contended that it had sufficiently complied with the reportorial requirements to the Department of Labor and Employment
(DOLE). It submitted photocopies of three Establishment Termination Reports it purportedly filed with the DOLE. They were
for: (1) the "PCSOQ.I. Project" for February 1999;15 (2) "SM Project" for August 1999;16 and (3) "SM Project" for October
2000,17 all of which included petitioner as among the affected employees. The submission of termination reports by PNCC
was however disputed by petitioner based on the verifications18 issued by the DOLE NCR office that he was not among the
affected employees listed in the reports filed by PNCC in August 1998, February 1999, August 1999 and October 2000.
On March 28, 2006, the Labor Arbiter rendered a Decision19 in favor of petitioner. The fallo reads:
WHEREFORE, premises considered, the complainant had attained regular employment thereby making his termination
from employment illegal since it was not for any valid or authorized causes. Consequently, Respondent is ordered to pay
complainant his full backwages less six (6) months computed as follows:
Backwages:
Feb. 18, 2000 March 28, 2006 = 73.33 mos.
P6,277.00 x 73.33 =

P460,292.41

Less:
P6,277.00 X 6 mos. =

37,662.00
P422,630.41

The reinstatement could not as well be ordered due to the strained relations between the parties, that in lieu thereof,
separation pay is ordered paid to complainant in the amount of P37,662.00 [P6,277.00 x 6].
SO ORDERED.20
The Labor Arbiter ruled that petitioner attained regular employment status with the repeated hiring and rehiring of his
services more so when the services he was made to render were usual and necessary to PNCCs business. The Labor
Arbiter likewise found that from the time petitioner was hired in 1996 until he was terminated, he was hired and rehired by
PNCC and made to work not only in the project he had signed to work on but on other projects as well, indicating that he is
in fact a regular employee. He also noted petitioners subsequent contracts did not anymore indicate the date of completion
of the contract and the fact that his first contract was extended way beyond the supposed completion date. According to the
Labor Arbiter, these circumstances indicate that the employment is no longer a project employment but has graduated into
a regular one. Having attained regular status, the Labor Arbiter ruled that petitioner should have been accorded his right to
security of tenure.
Both PNCC and petitioner appealed the Labor Arbiters decision. PNCC insisted that petitioner was just a project employee
and his termination was brought about by the completion of the contract and therefore he was not illegally dismissed.
Petitioner, on the other hand, argued that his reinstatement should have been ordered by the Labor Arbiter since there was
no proof that there were strained relations between the parties. He also questioned the deduction of six months pay from
the back wages awarded to him and the failure of the Labor Arbiter to award him damages and attorneys fees. Petitioner
likewise moved to dismiss PNCCs appeal contending that the supersedeas bond in the amount of P422,630.41 filed by the
latter was insufficient considering that the Labor Arbiters monetary award is P460,292.41. He also argued that the person
who verified the appeal, Felix M. Erece, Jr., Personnel Services Department Head of PNCC, has no authority to file the
same for and in behalf of PNCC.

On October 31, 2008, the NLRC rendered its Decision granting PNCCs appeal but dismissing that of petitioner. The
dispositive portion reads:
WHEREFORE, premises considered, the appeal of respondent is GRANTED and the Decision dated 28 March 2006 is
REVERSED and SET ASIDE.
A new Decision is hereby issued ordering respondent Philippine National Construction Corporation to pay completion bonus
to complainant Roy Domingo Pasos in the amount of P25,000.
Complainants appeal is DISMISSED for lack of merit.
SO ORDERED.21
As to the procedural issues raised by petitioner, the NLRC ruled that there was substantial compliance with the requirement
of an appeal bond and that Mr. Erece, Jr., as head of the Personnel Services Department, is the proper person to represent
PNCC. As to the substantive issues, the NLRC found that petitioner was employed in connection with certain construction
projects and his employment was co-terminus with each project as evidenced by the Personnel Action Forms and the
Termination Report submitted to the DOLE. It likewise noted the presence of the following project employment indicators in
the instant case, namely, the duration of the project for which petitioner was engaged was determinable and expected
completion was known to petitioner; the specific service that petitioner rendered in the projects was that of an accounting
clerk and that was made clear to him and the service was connected with the projects; and PNCC submitted termination
reports to the DOLE and petitioners name was included in the list of affected employees.
Petitioner elevated the case to the CA via a petition for certiorari but the appellate court dismissed the same for lack of
merit.
Hence this petition. Petitioner argues that the CA erred when it:
I.
SUSTAINED THAT THE AMOUNT OF THE BOND POSTED BY THE RESPONDENTS FOR PURPOSES OF APPEAL
WAS SUFFICIENT NOTWITHSTANDING THAT THE SAME IS LESS THAN THE ADJUDGED AMOUNT.
II.
SUSTAINED THAT FELIX M. ERECE, JR., HEAD OF RESPONDENT PNCCS PERSONNEL SERVICE DEPARTMENT,
IS DULY AUTHORIZED TO REPRESENT RESPONDENT IN THIS CASE NOTWITHSTANDING THE ABSENCE OF ANY
BOARD RESOLUTION OR SECRETARYS CERTIFICATE OF THE RESPONDENT STATING THAT INDEED HE WAS
DULY AUTHORIZED TO INSTITUTE THESE PROCEEDINGS.
III.
SUSTAINED THAT PETITIONER WAS A PROJECT EMPLOYEE DESPITE THE FACT THAT RESPONDENT PNCC HAD
NOT SUBMITTED THE REQUISITE TERMINATION REPORTS IN ALL OF THE ALLEGED PROJECTS WHERE THE
PETITIONER WAS ASSIGNED.
IV.
SUSTAINED THAT THE PETITIONER IS A PROJECT EMPLOYEE DESPITE THE CIRCUMSTANCE THAT THE ACTUAL
WORK UNDERTAKEN BY THE PETITIONER WAS NOT LIMITED TO THE WORK DESCRIBED IN HIS ALLEGED
APPOINTMENT AS A PROJECT EMPLOYEE.
V.
FAILED TO FIND THAT AT SOME TIME, THE EMPLOYMENT OF THE PETITIONER WAS UNREASONABLY EXTENDED
BEYOND THE DATE OF ITS COMPLETION AND AT OTHER TIMES THE SAME DID NOT BEAR A DATE OF
COMPLETION OR THAT THE SAME WAS READILY DETERMINABLE AT THE TIME OF PETITIONERS ENGAGEMENT
THEREBY INDICATING THAT HE WAS NOT HIRED AS A PROJECT EMPLOYEE.

VI.
FAILED TO ORDER THE REINSTATEMENT OF THE PETITIONER BY FINDING THAT THERE WAS STRAINED
RELATIONS BETWEEN THE PARTIES NOTWITHSTANDING THAT THE RESPONDENT NEVER EVEN ALLEGED NOR
PROVED IN ITS PLEADINGS THE CIRCUMSTANCE OF STRAINED RELATIONS.
VII.
SUSTAINED THE FAILURE OF THE NATIONAL LABOR RELATIONS COMMISSION TO RECTIFY THE ERROR
COMMITTED BY LABOR ARBITER LIBO-ON IN DEDUCTING THE EQUIVALENT OF SIX MONTHS PAY OF
BACKWAGES DESPITE THE MANDATE OF THE LABOR CODE THAT WHEN THERE IS A FINDING OF ILLEGAL
DISMISSAL, THE PAYMENT OF FULL BACKWAGES FROM DATE OF DIMISSAL UP TO ACTUAL REINSTATEMENT
SHOULD BE AWARDED.
VIII.
SUSTAINED THE FAILURE OF THE NATIONAL LABOR RELATIONS COMMISSION TO RECTIFY THE ERROR
COMMITTED BY LABOR ARBITER LIBO-ON IN FAILING TO AWARD DAMAGES AND ATTORNEYS FEES TO THE
PETITIONER.22
Petitioner contends that PNCCs appeal from the Labor Arbiters decision should not have been allowed since the appeal
bond filed was insufficient. He likewise argues that the appellate court erred in heavily relying in the case of Cagayan Valley
Drug Corporation v. Commissioner of Internal Revenue23 which enumerated the officials and employees who can sign the
verification and certification without need of a board resolution. He contends that in said case, there was substantial
compliance with the requirement since a board resolution was submitted albeit belatedly unlike in the instant case where
no board resolution was ever submitted even belatedly.
As to the substantive issue, petitioner submits that the CA erroneously concluded that he was a project employee when
there are indicators which point otherwise. He contends that even if he was just hired for the NAIA 2 Project from April 26,
1996 to July 25, 1996, he was made to work until August 4, 1998. He also avers the DOLE had certified that he was not
among the employees listed in the termination reports submitted by PNCC which belies the photocopies of termination
reports attached by PNCC to its pleadings listing petitioner as one of the affected employees. Petitioner points out that said
termination reports attached to PNCCs pleadings are mere photocopies and were not even certified by the DOLE-NCR as
true copies of the originals on file with said office. Further, he argues that in violation of the requirement of Department
Order No. 19 that the duration of the project employment is reasonably determinable, his contracts for the SM projects did
not specify the date of completion of the project nor was the completion determinable at the time that petitioner was hired.
PNCC counters that documentary evidence would show that petitioner was clearly a project employee and remained as
such until his last engagement. It argues that the repeated rehiring of petitioner as accounting clerk in different projects did
not make him a regular employee. It also insists that it complied with the reportorial requirements and that it filed and
reported the termination of petitioner upon every completion of project to which he was employed.
In sum, three main issues are presented before this Court for resolution: (1) Should an appeal be dismissed outright if the
appeal bond filed is less than the adjudged amount? (2) Can the head of the personnel department sign the verification and
certification on behalf of the corporation sans any board resolution or secretarys certificate authorizing such officer to do
the same? and (3) Is petitioner a regular employee and not a mere project employee and thus can only be dismissed for
cause?
Substantial compliance with appeal bond requirement
The perfection of an appeal within the reglementary period and in the manner prescribed by law is jurisdictional, and
noncompliance with such legal requirement is fatal and effectively renders the judgment final and executory. As provided in
Article 223 of the Labor Code, as amended, in case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited
by the Commission in the amount equivalent to the monetary award in the judgment appealed from.
However, not only in one case has this Court relaxed this requirement in order to bring about the immediate and appropriate
resolution of cases on the merits.24 In Quiambao v. National Labor Relations Commission,25 this Court allowed the relaxation
of the requirement when there is substantial compliance with the rule. Likewise, in Ong v. Court of Appeals,26 the Court held
that the bond requirement on appeals may be relaxed when there is substantial compliance with the Rules of Procedure of

the NLRC or when the appellant shows willingness to post a partial bond. The Court held that "while the bond requirement
on appeals involving monetary awards has been relaxed in certain cases, this can only be done where there was substantial
compliance of the Rules or where the appellants, at the very least, exhibited willingness to pay by posting a partial bond."
In the instant case, the Labor Arbiter in his decision ordered PNCC to pay petitioner back wages amounting to
P422,630.41 and separation pay of P37,662 or a total of P460,292.41. When PNCC filed an appeal bond amounting to
P422,630.41 or at least 90% of the adjudged amount, there is no question that this is substantial compliance with the
requirement that allows relaxation of the rules.
Validity of the verification and certification signed by a corporate officer on behalf of the corporation without the
requisite board resolution or secretarys certificate
It has been the constant holding of this Court in cases instituted by corporations that an individual corporate officer cannot
exercise any corporate power pertaining to the corporation without authority from the board of directors pursuant to Section
23, in relation to Section 25 of the Corporation Code which clearly enunciates that all corporate powers are exercised, all
business conducted, and all properties controlled by the board of directors. However, we have in many cases recognized
the authority of some corporate officers to sign the verification and certification against forum-shopping. Some of these
cases were enumerated in Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue27 which was cited by
the appellate court:
In Mactan-Cebu International Airport Authority v. CA, we recognized the authority of a general manager or acting general
manager to sign the verification and certificate against forum shopping; in Pfizer v. Galan, we upheld the validity of a
verification signed by an "employment specialist" who had not even presented any proof of her authority to represent the
company; in Novelty Philippines, Inc. v. CA, we ruled that a personnel officer who signed the petition but did not attach the
authority from the company is authorized to sign the verification and non-forum shopping certificate; and in Lepanto
Consolidated Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled that the Chairperson of the
Board and President of the Company can sign the verification and certificate against non-forum shopping even without the
submission of the boards authorization.
In sum, we have held that the following officials or employees of the company can sign the verification and certification
without need of a board resolution: (1) the Chairperson of the Board of Directors, (2) the President of a corporation, (3) the
General Manager or Acting General Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized signatories to the verification and certification required
by the rules, the determination of the sufficiency of the authority was done on a case to case basis. The rationale applied in
the foregoing cases is to justify the authority of corporate officers or representatives of the corporation to sign the verification
or certificate against forum shopping, being "in a position to verify the truthfulness and correctness of the allegations in the
petition."28 (Citations omitted.)
While we agree with petitioner that in Cagayan Valley, the requisite board resolution was submitted though belatedly unlike
in the instant case, this Court still recognizes the authority of Mr. Erece, Jr. to sign the verification and certification on behalf
of PNCC sans a board resolution or secretarys certificate as we have allowed in Pfizer, Inc. v. Galan,29 one of the cases
cited in Cagayan Valley. In Pfizer, the Court ruled as valid the verification signed by an employment specialist as she was
in a position to verify the truthfulness and correctness of the allegations in the petition30 despite the fact that no board
resolution authorizing her was ever submitted by Pfizer, Inc. even belatedly. We believe that like the employment specialist
in Pfizer, Mr. Erece, Jr. too, as head of the Personnel Services Department of PNCC, was in a position to assure that the
allegations in the pleading have been prepared in good faith and are true and correct.
Even assuming that the verification in the appeal filed by PNCC is defective, it is well settled that rules of procedure in labor
cases maybe relaxed. As provided in Article 221 of the Labor Code, as amended, "rules of evidence prevailing in courts of
law or equity shall not be controlling and it is the spirit and intention of this Code that the Commission and its members and
the Labor Arbiters shall use every and all reasonable means to ascertain the facts in each case speedily and objectively
and without regard to technicalities of law or procedure, all in the interest of due process." Moreover, the requirement of
verification is merely formal and not jurisdictional. As held in Pacquing v. Coca-Cola Philippines, Inc.31:
As to the defective verification in the appeal memorandum before the NLRC, the same liberality applies. After all, the
requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a condition affecting
the form of pleading, the noncompliance of which does not necessarily render the pleading fatally defective. Verification is
simply intended to secure an assurance that the allegations in the pleading are true and correct and not the product of the
imagination or a matter of speculation, and that the pleading is filed in good faith. The court or tribunal may order the

correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending
circumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice may
thereby be served.32
Duration of project employment should be determined at the time of hiring
In the instant case, the appointments issued to petitioner indicated that he was hired for specific projects. This Court is
convinced however that although he started as a project employee, he eventually became a regular employee of PNCC.
Under Article 280 of the Labor Code, as amended, a project employee is one whose "employment has been fixed for a
specific project or undertaking the completion or termination of which has been determined at the time of the engagement
of the employee or where the work or services to be performed is seasonal in nature and the employment is for the duration
of the season." Thus, the principal test used to determine whether employees are project employees is whether or not the
employees were assigned to carry out a specific project or undertaking, the duration or scope of which was specified at the
time the employees were engaged for that project.33
In the case at bar, petitioner worked continuously for more than two years after the supposed three-month duration of his
project employment for the NAIA II Project. While his appointment for said project allowed such extension since it specifically
provided that in case his "services are still needed beyond the validity of the contract, the Company shall extend his
services," there was no subsequent contract or appointment that specified a particular duration for the extension. His
services were just extended indefinitely until "Personnel Action Form Project Employment" dated July 7, 1998 was issued
to him which provided that his employment will end a few weeks later or on August 4, 1998. While for first three months,
petitioner can be considered a project employee of PNCC, his employment thereafter, when his services were extended
without any specification of as to the duration, made him a regular employee of PNCC. And his status as a regular employee
was not affected by the fact that he was assigned to several other projects and there were intervals in between said projects
since he enjoys security of tenure.
Failure of an employer to file termination reports after every project completion proves that an employee is not a
project employee
As a rule, the findings of fact of the CA are final and conclusive and this Court will not review them on appeal.34 The rule,
however, is subject to the following exceptions:
The jurisdiction of the Court in cases brought before it from the appellate court is limited to reviewing errors of law, and
findings of fact of the Court of Appeals are conclusive upon the Court since it is not the Courts function to analyze and
weigh the evidence all over again. Nevertheless, in several cases, the Court enumerated the exceptions to the rule that
factual findings of the Court of Appeals are binding on the Court: (1) when the findings are grounded entirely on speculations,
surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are
contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to that of the trial court;
(8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set
forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the
findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; or (11)
when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.35
In this case, records clearly show that PNCC did not report the termination of petitioners supposed project employment for
the NAIA II Project to the DOLE. Department Order No. 19, or the "Guidelines Governing the Employment of Workers in the
Construction Industry," requires employers to submit a report of an employees termination to the nearest public employment
office every time an employees employment is terminated due to a completion of a project. PNCC submitted as evidence
of its compliance with the requirement supposed photocopies of its termination reports, each listing petitioner as among the
employees affected. Unfortunately, none of the reports submitted pertain to the NAIA II Project. Moreover, DOLE NCR
verified that petitioner is not included in the list of affected workers based on the termination reports filed by PNCC on
August 11, 17, 20 and 24, 1998 for petitioners supposed dismissal from the NAIA II Project effective August 4, 1998. This
certification from DOLE was not refuted by PNCC. In Tomas Lao Construction v. NLRC,36 we emphasized the
indispensability of the reportorial requirement:
Moreover, if private respondents were indeed employed as "project employees," petitioners should have submitted a report
of termination to the nearest public employment office every time their employment was terminated due to completion of

each construction project. The records show that they did not. Policy Instruction No. 20 is explicit that employers of project
employees are exempted from the clearance requirement but not from the submission of termination report. We have
consistently held that failure of the employer to file termination reports after every project completion proves that the
employees are not project employees. Nowhere in the New Labor Code is it provided that the reportorial requirement is
dispensed with. The fact is that Department Order No. 19 superseding Policy Instruction No. 20 expressly provides that the
report of termination is one of the indicators of project employment.37
A regular employee dismissed for a cause other than the just or authorized causes provided by law is
illegally dismissed
Petitioners regular employment was terminated by PNCC due to contract expiration or project completion, which are both
not among the just or authorized causes provided in the Labor Code, as amended, for dismissing a regular employee. Thus,
petitioner was illegally dismissed.
Article 279 of the Labor Code, as amended, provides that an illegally dismissed employee is entitled to reinstatement, full
back wages, inclusive of allowances, and to his other benefits or their monetary equivalent from the time his compensation
was withheld from him up to the time of his actual reinstatement.
We agree with petitioner that there was no basis for the Labor Arbiters finding of strained relations and order of separation
pay in lieu of reinstatement. This was neither alleged nor proved. Moreover, it has long been settled that the doctrine of
strained relations should be strictly applied so as not to deprive an illegally dismissed employee of his right to reinstatement.
As held in Globe-Mackay Cable and Radio Corporation v. NLRC:38
Obviously, the principle of "strained relations" cannot be applied indiscriminately. Otherwise, reinstatement can never be
possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human
nature.
Besides, no strained relations should arise from a valid and legal act of asserting ones right; otherwise an employee who
shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his
relationship with his employer had already become strained.39
As to the back wages due petitioner, there is likewise no basis in deducting therefrom back wages equivalent to six months
"representing the maximum period of confinement PNCC can require him to undergo medical treatment." Besides, petitioner
was not dismissed on the ground of disease but expiration of term of project employment.
Regarding moral and exemplary damages, this Court rules that petitioner is not entitled to them.1wphi1 Worth reiterating
is the rule that moral damages are recoverable where the dismissal of the employee was attended by bad faith or fraud or
constituted an act oppressive to labor, or was done in a manner contrary to morals, good customs, or public policy. Likewise,
exemplary damages may be awarded if the dismissal was effected in a wanton, oppressive or malevolent manner.40 Apart
from his allegations, petitioner did not present any evidence to prove that his dismissal was attended with bad faith or was
done oppressively.
Petitioner is also entitled to attorney's fees m the amount of ten percent (10%) of his total monetary award, having been
forced to litigate in order to seek redress of his grievances, as provided in Article 111 of the Labor Code, as amended, and
following this Court's pronouncement in Exodus International Construction Corporation v. Biscocho.41
In line with current jurisprudence, the award of back wages shall earn legal interest at the rate of six percent ( 6%) per
annum from the date of petitioner's dismissal until the finality of this decision.42 Thereafter, it shall earn 12% legal interest
until fully paid43 in accordance with the guidelines in Eastern Shipping Lines, Inc. v. Court of Appeals.44
WHEREFORE, the petition is GRANTED. The assailed March 26, 2010 Decision and May 26, 2010 Resolution of the Court
of Appeals in CAG.R. SP No. 107805 are hereby REVERSED. The decision of the Labor Arbiter is hereby REINSTATED
with the following MODIFICATIONS:
1) respondent PNCC is DIRECTED to pay petitioner Roy D. Pasos full back wages from the time of his illegal
dismissal on October 19, 2000 up to the finality of this Decision, with interest at 6% per annum, and 12% legal
interest thereafter until fully paid;

2) respondent PNCC is ORDERED to reinstate petitioner Pasos to his former position or to a substantially equivalent
one, without loss of seniority rights and other benefits attendant to the position; and
3) respondent PNCC is DIRECTED to pay petitioner Pasos attorney's fees equivalent to 10% of his total monetary
award.
No pronouncement as to costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice

G.R. No. 159730

February 11, 2008

NORKIS TRADING CO., INC. and/or MANUEL GASPAR E. ALBOS, JR., petitioner,
vs.
MELVIN GNILO, respondent.**
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking to annul and set aside the
Decision1 dated June 20, 2003 and the Resolution2 dated August 25, 2003 of the Court of Appeals (CA) in CA G.R. SP No.
72568.
Melvin R. Gnilo (respondent) was initially hired by Norkis Trading Co., Inc. (petitioner Norkis) as Norkis Installment Collector
(NIC) in April 1988. Manuel Gaspar E. Albos, Jr. (petitioner Albos) is the Senior Vice-President of petitioner Norkis.
Respondent held various positions in the company until he was appointed as Credit and Collection Manager of Magna
Financial Services Group, Inc.-Legaspi Branch, petitioner Norkiss sister company, in charge of the areas of Albay and
Catanduanes with travel and transportation allowances and a service car.
A special audit team was conducted in respondent's office in Legaspi, Albay from March 13 to April 5, 2000 when it was
found out that respondent forwarded the monthly collection reports of the NICs under his supervision without checking the
veracity of the same. It appeared that the monthly collection highlights for the months of April to September 1999 submitted
by respondent to the top management were all overstated particularly the account handled by NIC Dennis Cadag, who
made it appear that the collection efficiency was higher than it actually was; and that the top management was misled into
believing that respondents area of responsibility obtained a favorable collection efficiency.
Respondent was then charged by petitioners' Inquiry Assistance Panel (Panel) with negligence of basic duties and
responsibilities resulting in loss of trust and confidence and laxity in directing and supervising his own subordinates. During
the investigation, respondent admitted that he was negligent for failing to regularly check the report of each NIC under his
supervision; that he only checked at random the NIC's monthly collection highlight reports; and that as a leader, he is
responsible for the actions of his subordinates. He however denied being lax in supervising his subordinates, as he imposed
discipline on them if the need arose.
On May 30, 2000, petitioner Norkis through its Human Resource Manager issued a memorandum3 placing respondent
under 15 days suspension without pay, travel and transportation allowance, effective upon receipt thereof. Respondent filed
a letter protesting his suspension and seeking a review of the penalty imposed.
Another memorandum4 dated June 30, 2000 was issued to respondent requiring him to report on July 5, 2000 to the head
office of petitioner Norkis in Mandaluyong City for a re-training or a possible new assignment without prejudice to his request
for a reconsideration or an appeal of his suspension. He was then assigned to the Marketing Division directly reporting to
petitioner Albos.
In a letter5 dated July 27, 2000, respondent requested petitioner Albos that he be assigned as Sales Engineer or to any
position commensurate with his qualifications. However, on July 28, 2000, respondent was formally appointed as Marketing
Assistant to petitioner Albos, which position respondent subsequently assumed.
However, on October 4, 2000, respondent filed with the Labor Arbiter (LA) a complaint for illegal suspension, constructive
dismissal, non-payment of allowance, vacation/sick leave, damages and attorney's fees against petitioners.
On March 30, 2001, the LA rendered his decision6 dismissing the complaint for lack of merit.
The LA found that the position of Credit and Collection Manager held by respondent involved a high degree of responsibility
requiring trust and confidence; that his failure to observe the required procedure in the preparation of reports, which resulted
in the overstated collection reports continuously for more than six months, was sufficient to breach the trust and confidence
of petitioners and was a valid ground for termination; that instead of terminating him, petitioners merely imposed a 15-day
suspension which was not illegal; and that petitioners exercised their inherent prerogative as an employer when they
appointed respondent as a Marketing Assistant.

Respondent appealed the LA decision to the National Labor Relations Commission (NLRC). In a Resolution7 dated January
29, 2002, the NLRC reversed the LA, the dispositive portion of which reads:
WHEREFORE, premises considered, complainant's appeal is partly GRANTED. The Labor Arbiter's decision in the
above-entitled case is REVERSED. It is hereby declared that complainant was constructively dismissed from his
employment. Respondent Norkis Trading Co., Inc is ordered to pay complainant the amount of P411,796.00 as
backwages and separation pay, plus ten percent (10%) thereof as attorney's fees.8
In so ruling, the NLRC found that the 15-day suspension cannot be considered harsh and unconscionable as petitioners
validly exercised their management prerogative to impose discipline on an erring employee for negligence by submitting
unreliable and inaccurate reports for six consecutive months to the top management who used the reports in their planning
and decision-making activities, and thus caused damage or injury one way or another to petitioners. It however held that
the transfer of respondent from the position of Credit and Collection Manager to Marketing Assistant resulted in his demotion
in rank from Manager to a mere rank and file employee, which was tantamount to constructive dismissal and therefore
illegal.
The NLRC ruled that respondent was constructively dismissed and therefore he was entitled to reinstatement and payment
of full backwages from the time he quit working on October 19, 2000 due to his demotion up to the time of his actual
reinstatement. However, it found that the parties' relationship was already strained on account of this case; thus, it ordered
the payment of respondents separation pay equivalent to his one-month salary for every year of service. It upheld the LA's
dismissal of respondent's prayer for damages for failure to submit substantial evidence to support the same, but awarded
attorney's fees.
Petitioners filed their Motion for Reconsideration while respondent filed his Motion for Reconsideration/Clarification.
On June 24, 2002, the NLRC issued another Resolution,9 the dispositive portion of which reads:
WHEREFORE, premises considered, respondents' [petitioners] motion for reconsideration is DENIED for lack of
merit while complainant's [respondent] motion for reconsideration is GRANTED. This Commission's January 29,
2002 Resolution in the above-entitled case is hereby AFFIRMED with the MODIFICATION that respondent Norkis
Trading Company, Inc. is ordered to pay complainant the adjusted amount of P444,739.38 as backwages,
separation pay, 13th month pay and refund of provident fund contribution.10
In granting respondent's motion for reconsideration, the NLRC found that petitioners admitted in their Rejoinder that they
had not paid respondent his 13th-month pay and that respondent had yet to make a written request for the refund of his
provident fund contribution; thus, respondent was entitled thereto and the provident fund contribution must also be returned
to him.
Petitioners filed a petition for certiorari with the CA. Subsequently, they also filed a Motion for the Issuance of a Temporary
Restraining Order or a Writ of Preliminary Injunction, as respondent had filed a Motion for the Issuance of a Writ of Execution
with the NLRC.
On June 20, 2003, the CA rendered its assailed Decision denying the petition and affirming the NLRC Resolutions.
On August 25, 2003, the CA denied petitioners Motion for Reconsideration.
Hence, herein petition wherein petitioners assigned the following errors committed by the CA:
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE ERRONEOUS FINDINGS
OF THE NLRC DESPITE THE FACT THAT THE NLRC OVERLOOKED, MISAPPRECIATED OR MISAPPLIED
SOME FACTS THAT WOULD HAVE AFFECTED THE RESULT OF THE CASE.
THE HONORABLE COURT OF APPEALS ACTED CONTRARY TO LAW AND JURISPRUDENCE WHEN IT HELD
THAT PRIVATE RESPONDENT WAS CONSTRUCTIVELY DISMISSED. 11
Petitioners contend that factual findings of quasi-judicial agencies, while generally accorded finality, may be reviewed by
this Court when the findings of the NLRC and the LA are contradictory; that in the exercise of its equity jurisdiction, this
Court may look into the records of the case to re-examine the questioned findings.

Petitioners claim that they were merely exercising their inherent prerogative as an employer when they appointed
respondent as Marketing Assistant to the Senior Vice-President for Marketing; that respondent's performance evaluations
during the previous years showed that he was weak in the financial aspect of operation, but was good in marketing; thus,
he would function with utmost efficiency and maximum benefit to the company in the Marketing Department; and that he
had accepted his appointment unconditionally.
Petitioners submit that the positions of Credit and Collection Manager and Marketing Assistant are co-equal and of the same
level of authority; that the scope of work of a Marketing Assistant is wider, since he has access to confidential informations
and has the chance to communicate directly with higher officers of the company; that his area of responsibility as Credit
and Collection Manager was limited to branches located in Legaspi City and Virac, Catanduanes; whereas as Marketing
Assistant, he is responsible for analyzing and coordinating all marketing information relevant to the company's motorcycles
from all over Luzon, and his reports are necessary for the planning and decision-making activities of petitioners' top
management; and that there is no demotion, since respondent's position is more encompassing and vital to the company
and he is receiving the same salary.
Petitioners also contend that they should not be adjudged to pay attorney's fees as they did not act in bad faith.
In his Comment, respondent states that it is not the function of this Court to analyze and weigh all over again the evidence
already considered in the proceedings below, as its jurisdiction is limited to reviewing errors of law; that the CA had not only
passed upon the legal/factual issues and arguments presented by the parties but had waded into the records and found out
that the findings of the NLRC were supported by substantial evidence. He informs this Court that he was able to enforce
the writ of execution issued by the NLRC and subsequently secured the release of the monetary award on November 14,
2003.
The parties thereafter filed their respective memoranda.
The issue for resolution is whether respondent's transfer from the position of Credit and Collection Manager to that of a
Marketing Assistant amounts to a constructive dismissal. This is a factual matter. Rule 45 of the Rules of Court provides
that only questions of law may be raised in a petition for review on certiorari. The raison d'etre is that the Court is not a trier
of facts. It is not to re-examine and re-evaluate the evidence on record. The general rule is that the factual findings of the
NLRC, as affirmed by the CA, are accorded high respect and finality unless the factual findings and conclusions of the LA
clash with those of the NLRC and the CA, as it appears in this case. Thus we have to review the records and the arguments
of the parties to resolve the factual issues and render substantial justice to the parties.12
Well-settled is the rule that it is the prerogative of the employer to transfer and reassign employees for valid reasons and
according to the requirement of its business.13 An owner of a business enterprise is given considerable leeway in managing
his business. Our law recognizes certain rights, collectively called management prerogative as inherent in the management
of business enterprises. We have consistently recognized and upheld the prerogative of management to transfer an
employee from one office to another within the business establishment, provided that there is no demotion in rank or
diminution of his salary, benefits and other privileges14 and the action is not motivated by discrimination, made in bad faith,
or effected as a form of punishment or demotion without sufficient cause.15 This privilege is inherent in the right of employers
to control and manage their enterprises effectively.16
The right of employees to security of tenure does not give them vested rights to their positions to the extent of depriving
management of its prerogative to change their assignments or to transfer them. Managerial prerogatives, however, are
subject to limitations provided by law, collective bargaining agreements, and general principles of fair play and justice.17
The employer bears the burden of showing that the transfer is not unreasonable, inconvenient or prejudicial to the employee;
and does not involve a demotion in rank or a diminution of his salaries, privileges and other benefits.18 Should the employer
fail to overcome this burden of proof, the employees transfer shall be tantamount to constructive dismissal.19
Constructive dismissal is defined as a quitting because continued employment is rendered impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution of pay.20 Likewise, constructive dismissal exists when an act of
clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee, leaving him with no option
but to forego his continued employment.21
A transfer is defined as a "movement from one position to another which is of equivalent rank, level or salary, without break
in service."22 Promotion, on the other hand, is the "advancement from one position to another with an increase in duties and
responsibilities as authorized by law, and usually accompanied by an increase in salary."23 Conversely, demotion involves
a situation in which an employee is relegated to a subordinate or less important position constituting a reduction to a lower

grade or rank, with a corresponding decrease in duties and responsibilities, and usually accompanied by a decrease in
salary.24
In this case, while the transfer of respondent from Credit and Collection Manager to Marketing Assistant did not result in the
reduction of his salary, there was a reduction in his duties and responsibilities which amounted to a demotion tantamount
to a constructive dismissal as correctly held by the NLRC and the CA.
A comparison in the nature of work of these two positions shows a great difference. As Credit and Collection Manager,
respondent was clothed with all the duties and responsibilities of a managerial employee. He could devise and implement
action plans to meet his objectives and exercise independent judgment in resolving problem accounts. He had power and
control over NICs, Branch Control Officers (BCOs) and Cashiers under his supervision, and he provided them training in
the performance of their respective works. Further, he had the authority to ensure reserves in the NICs, BCOs and Cashiers
in case of expansion, reassignment and/or termination. There is no doubt that said position of Credit and Collection Manager
entails great duties and responsibilities and involves discretionary powers. In fact, even in petitioners pleadings, they
repeatedly stated that the position involved a high degree of responsibility requiring trust and confidence as it relates closely
to the financial interest of the company.
On the other hand, the work of a Marketing Assistant is clerical in nature, which does not involve the exercise of any
discretion. Such job entails mere data gathering on vital marketing informations relevant to petitioners' motorcycles and
making reports to his direct supervisor. He is a mere staff member in the office of the Senior Vice-President for Marketing.
While petitioners claim that the position of a Marketing Assistant covers a wide area as compared with the position of Credit
and Collection Manager, the latter is reposed with managerial duties in overseeing petitioners business in his assigned
area, unlike the former in which he merely collates raw data. These two positions are not of the same level of authority.
There is constructive dismissal when an employee's functions, which were originally supervisory in nature, were reduced;
and such reduction is not grounded on valid grounds such as genuine business necessity.25
We quote with approval the findings of the CA on the matter of respondent's demotion in his functions, thus:
x x x Studying minutely the proof proffered by both sides, our considered ruling is that there is more than the
requisite quantum of evidence in support of the NLRC's conclusion that indeed, private respondent was
constructively dismissed. This is evident, not only from the much reduced powers and prerogatives of the private
respondent when his position was changed from Credit and Collection Manager to Marketing Assistant to the Senior
Vice President; the variance in the duties between the two, as may be gleaned from the definition of functions made
of record, in this case, are glaring and indubitable. As Credit and Collection Manager, private respondent had the
authority to "devise and implement action plans x x x, manage and control the security and safety of collections and
repossessed units x x x, effectively supervise, teach and train BCO and cashiers x x x, discipline NIC's, BCO's and
cashiers, x x x," among others. In other words, he was part of management, or was at the supervisory level, to say
the least. On the other hand, as Marketing Assistant to the Senior Vice President, private respondent was stripped
of all management and oversize wherewithal, and became an appendage of his immediate supervisor, confined to
such mundane functions as to "analyze monthly LTO data x x x, coordinate with Sales Engineers x x x, and make
quarterly reports x x x," give inputs on such dreary information such as prices of rice and copra, tobacco and
gasoline, sources of people's income, peace and order situation, prepare brochures, etc., which are humdrum
clerical tasks requiring little or no discretion. Worse, he lost all the people under him, and had no staff, and was
relegated to a "mere rank and file employee who had no one under his supervision and whose duties were merely
routinary and clerical in nature which did not require the use of independent judgment."26
Moreover, petitioners failed to refute respondents claim that as Credit and Collection Manager, he was provided with a
service car which was no longer available to him as Marketing Assistant; thus, such was a reduction in his benefit.
There is also constructive dismissal when an act of clear discrimination, insensibility, or disdain by an employer becomes
so unbearable on the part of the employee as to foreclose any choice on his part except to resign from such employment.27
As aptly observed by the CA, to wit:
While we may allow petitioners the leeway of disciplining its employees, which is why we uphold the finding of the
NLRC that the fifteen-day suspension of private respondent was legal and proper, We cannot countenance the
barbaric treatment suffered by the latter in the hands of his bosses. Undisputed it is that not only was private
respondent made to look like an idiot when he was not given work in his new assignment, but that he was humiliated
and debased when petitioner Albos, in a very uncouth manner, hurled expletives at the private respondent, calling
him bobo, gago and screaming putang ina mo in front of him, at the same time "crumpling (his) report" and throwing

it into his face. Such undignified and boorish deeds perpetrated against private respondent directly caused him to
forthwith leave the employ of petitioner corporation, which he served loyally for some twelve (12) years. 28
Respondents demotion in the nature of his functions coupled with petitioner Alboss act of insensibility no doubt amounts
to his constructive dismissal.
Anent petitioners' claim that respondent unconditionally accepted his formal appointment as Marketing Assistant on August
3, 2000, we note that in a letter dated July 27, 2000 addressed to petitioner Albos when he learned that he would be
assigned as a Marketing Assistant, respondent had expressed reservations on such assignment and asked that he instead
be assigned as Sales Engineer or to any position commensurate to his qualifications. Respondent could not be faulted for
accepting the position of a Marketing Assistant, since he did so and stayed put in order to compare and evaluate his position.
However, he experienced not only a demotion in his duties and responsibilities, an undignified treatment by his immediate
superior, which prompted him to file this case.
Petitioners argue that it is patently inimical to their interest if respondent would be maintained in the position of Credit and
Collection Manager, as he was negligent in the performance of his duties as such; that the 1999 incident was not the first
time that respondent forwarded to top management overstated collection reports, since three of the NICs under respondent's
supervision committed similar misrepresentations in 1997; and that it has been held that the mere existence of a basis for
believing that the supervisor or other personnel occupying positions of responsibility has breached the trust and confidence
reposed in him by his employer is a sufficient ground for dismissal.
While petitioners have the prerogative to transfer respondent to another position, such transfer should be done without
diminution of rank and benefits which has been shown to be present in respondent's case. He could have been transferred
to a job of managerial position and not to that of a Marketing Assistant. Moreover, petitioners failed to substantiate their
claim that respondent was weak in the financial aspect of operation, but he was good in marketing, as the performance
evaluation report relied upon by petitioners would not suffice. On the other hand, the evaluation report dated March 10,
1997 stated that respondent's track records in sales and collection showed his potential for advancement and could be the
basis for his promotion to Marketing Manager.
We note that the alleged overstated collection reports of three NICs under respondent's supervision submitted in 1997, were
already mentioned in the IAP report of the 1999 incident for which respondent was meted the penalty of 15- day suspension
without salary, travel and transportation allowance; thus, the same could no longer be used to justify his transfer. Moreover,
respondent's demotion, which was a punitive action, was, in effect, a second penalty for the same negligent act of
respondent.
Finally, we find no error committed by the NLRC in awarding attorney's fees. In San Miguel Corporation v. Aballa,29 we held
that in actions for recovery of wages or where an employee was forced to litigate and thus incur expenses to protect his
rights and interests, a maximum of 10% of the total monetary award by way of attorney's fees is justifiable under Article 111
of the Labor Code,30 Section 8, Rule VIII, Book III of its Implementing Rules;31 and paragraph 7, Article 2208 of the Civil
Code.32 The award of attorney's fees is proper and there need not be any showing that the employer acted maliciously or
in bad faith when it withheld the wages. There need only be a showing that the lawful wages were not paid accordingly.33
WHEREFORE, the petition is DENIED. The Decision dated June 20, 2003 and the Resolution dated August 25, 2003 of the
Court of Appeals are AFFIRMED.
Costs against petitioners.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice

G.R. No. 199890

August 19, 2013

JEROME M. DAABAY, PETITIONER,

vs.
COCA-COLA BOTTLERS PHILS., INC., RESPONDENT.
DECISION
REYES, J.:
This resolves petitioner Jerome M. Daabays (Daabay) Verified Petition for Review1 , which assails the Decision2 dated
June 24, 2011 and Resolution3 dated December 9, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 03369-MIN.
The case stems from a complaint for illegal dismissal, illegal suspension, unfair labor practice and monetary claims filed by
Daabay against respondent Coca-Cola Bottlers Phils., Inc. (Coca-Cola) and three officers of the company.4 The records
indicate that the employment of Daabay with Coca-Cola as Sales Logistics Checker was terminated by the company in
June 2005,5 following receipt of information from one Cesar Sorin (Sorin) that Daabay was part of a conspiracy that allowed
the pilferage of company property.6
The allegations of Sorin were embodied in an affidavit which he executed on April 16, 2005.7 The losses to the company
were also confirmed by an inventory and audit conducted by Coca-Colas Territory Finance Head, Silvia Ang. Such losses
comprised of cases of assorted softdrinks, empty bottles, missing shells and missing pallets valued at P20,860,913.00.8
Coca-Cola then served upon Daabay a Notice to Explain with Preventive Suspension, which required him to explain in
writing his participation in the scheme that was reported to involve logistics checkers and gate guards. In compliance
therewith, Daabay submitted an Explanation dated April 19, 2005 wherein he denied any participation in the reported
pilferage.9
A formal investigation on the matter ensued. Eventually, Coca-Cola served upon Daabay a Notice of Termination that cited
pilferage, serious misconduct and loss of trust and confidence as grounds. At the time of his dismissal, Daabay had been a
regular employee of Coca-Cola for eight years, and was receiving a monthly pay of P20,861.00, exclusive of other benefits.10
Daabay then filed the subject labor complaint against Coca-Cola and Roberto Huang (Huang), Raymund Salvador
(Salvador) and Alvin Garcia (Garcia), who were the President and Plant Logistics Managers, respectively, of Coca-Cola at
the time of the dispute.11 On April 18, 2008, Executive Labor Arbiter Noel Augusto S. Magbanua (ELA Magbanua) rendered
his Decision12 in favor of Daabay. He ruled that Daabay was illegally dismissed because his participation in the alleged
conspiracy was not proved by substantial evidence. In lieu of reinstatement and considering the already strained relations
between the parties, ELA Magbanua ordered the payment to Daabay of backwages and separation pay or retirement
benefits, as may be applicable. The dispositive portion of ELA Magbanuas Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered declaring the dismissal of complainant Jerome Daabay
as illegal, and ordering respondents to pay complainant his backwages in the amount of [P]750,996.00.
Additionally, respondents are hereby ordered to pay complainant his separation pay at one (1) month for every year of
service, or his retirement benefits based on the latest Collective Bargaining Agreement prior to his suspension/termination.
Other claims are hereby ordered dismissed for failure to substantiate.
SO ORDERED.13
Dissatisfied, Coca-Cola, Huang, Salvador and Garcia, appealed from ELA Magbanuas Decision to the National Labor
Relations Commission (NLRC). Daabay filed a separate appeal to ask for his reinstatement without loss of seniority rights,
the payment of backwages instead of separation pay or retirement benefits, and an award of litigation expenses, moral and
exemplary damages and attorneys fees.
The NLRC reversed the finding of illegal dismissal. In a Resolution14 dated August 27, 2009, the NLRC held that there was
"reasonable and well-founded basis to dismiss [Daabay], not only for serious misconduct, but also for breach of trust or loss
of confidence arising from such company losses."15 Daabays participation in the conspiracy was sufficiently established.
Several documents such as checkers receipts and sales invoices that made the fraudulent scheme possible were signed

by Daabay.16 The NLRC also found fault in Daabay for his failure to detect the pilferage, considering that the "timely
recording and monitoring as security control for the outgoing [sic] of company products are necessarily connected with the
functions, duties and responsibilities reposed in him as Sales Logistics Checker."17 Notwithstanding its ruling on the legality
of the dismissal, the NLRC awarded retirement benefits in favor of Daabay. The dispositive portion of its Resolution reads:
WHEREFORE, premises considered, the appeal of complainant is DENIED for lack of merit, while that of respondent CocaCola Bottlers Philippines, Inc. is GRANTED.
Accordingly, the assailed 18 April 2008 Decision of the Executive Labor Arbiter is hereby REVERSED and SET ASIDE, and
a new judgment is entered DISMISSING the present complaint for want of evidence.
Let, however, this case be REMANDED to the Executive Labor Arbiter or the Regional Arbitration Branch of origin for the
computation of complainants retirement benefits in accordance with the latest Collective Bargaining Agreement prior to his
termination.
SO ORDERED.18
Coca-Colas partial motion for reconsideration to assail the award of retirement benefits was denied by the NLRC in a
Resolution19 dated October 30, 2009. The NLRC explained that there was a need "to humanize the severe effects of
dismissal"20 and "tilt the scales of justice in favor of labor as a measure of equity and compassionate social justice."21
Daabay also moved to reconsider, but his motion remained unresolved by the NLRC.22 Undaunted, Coca-Cola appealed to
the CA.
The CA agreed with Coca-Cola that the award of retirement benefits lacked basis considering that Daabay was dismissed
for just cause. It explained:
We are not oblivious of the instances where the Court awarded financial assistance to dismissed employees, even though
they were terminated for just causes. Equity and social justice was the vague justification. Quickly realizing the unjustness
of these [s]o-called equitable awards, the Supreme Court took the opportunity to curb and rationalize the grant of financial
assistance to legally dismissed employees. Thus, in Philippine Long Distance Telephone Company v. National Labor
Relations Commission, the Supreme Court recognized the harsh realities faced by employees that forced them, despite
their good intentions, to violate company policies, for which the employer can rightfully terminate their employment. For
these instances, the award of financial assistance was allowed. But, in clear and unmistakable language, the Supreme
Court also held that the award of financial assistance should not be given to validly terminated employees, whose offenses
are iniquitous or reflective of some depravity in their moral character. x x x.23 (Citation omitted)
Thus, the dispositive portion of its Decision dated June 24, 2011 reads:
FOR THESE REASONS, the writ of certiorari is GRANTED; the portion of the Resolution promulgated on 27 August 2009
remanding of the case to the Executive Labor Arbiter or the Regional Arbitration Branch of origin for computation of
retirement benefits is DELETED.
SO ORDERED.24
Daabays motion for reconsideration was denied in a Resolution25 dated December 9, 2011; hence, this petition.
It bears stressing that although the assailed CA decision and resolution are confined to the issue of Daabays entitlement
to retirement benefits, Daabay attempts to revive through the present petition the issue of whether or not his dismissal had
factual and legal bases. Thus, instead of confining itself to the issue of whether or not Daabay should be entitled to the
retirement benefits that were awarded by the NLRC, the petition includes a plea upon the Court to affirm ELA Magbanuas
Decision, with the modification to include: (a) his allowances and other benefits or their monetary equivalent in the
computation of his backwages; (b) his actual reinstatement; and (c) damages, attorneys fees and litigation expenses.
We deny the petition.
We emphasize that the appeal to the CA was brought not by Daabay but by Coca-Cola, and was limited to the issue of
whether or not the award of retirement benefits in favor of Daabay was proper. Insofar as CA-G.R. SP No. 03369-MIN was
concerned, the correctness of the NLRCs pronouncement on the legality of Daabays dismissal was no longer an issue,
even beyond the appellate courts authority to modify. In Andaya v. NLRC,26 the Court emphasized that a party who has not

appealed from a decision may not obtain any affirmative relief from the appellate court other than what he had obtained
from the lower court, if any, whose decision is brought up on appeal.27 Further, we explained in Yano v. Sanchez,28 that the
entrenched procedural rule in this jurisdiction is that a party who did not appeal cannot assign such errors as are designed
to have the judgment modified. All that he can do is to make a counter-assignment of errors or to argue on issues raised
below only for the purpose of sustaining the judgment in his favor.29 Due process prevents the grant of additional awards to
parties who did not appeal.30 Considering that Daabay had not yet appealed from the NLRCs Resolution to the CA, his plea
for the modification of the NLRCs findings was then misplaced. For the Court to review all matters that are raised in the
petition would be tolerant of what Daabay was barred to do before the appellate court.
Before the CA and this Court, Daabay attempts to justify his plea for relief by stressing that he had filed his own motion for
reconsideration of the NLRCs Resolution dated August 27, 2009 but the same remained unacted upon by the NLRC. Such
bare allegation, however, is insufficient to allow the issue to be disturbed through this petition. We take note of Daabays
failure to attach to his petition a copy of the motion which he allegedly filed with the NLRC. It is also quite baffling why
Daabay does not appear to have undertaken steps to seek the NLRCs resolution on the motion, even after it remained
unresolved for more than two years from its supposed filing.
Granting that such motion to reconsider was filed with the NLRC, the labor tribunal shall first be given the opportunity to
review its findings and rulings on the issue of the legality of Daabays dismissal, and then correct them should it find that it
erred in its disposition. The Court cannot, by this petition, pre-empt the action which the NLRC, and the CA in case of an
appeal, may take on the matter.
Even as we limit our present review to the lone issue that was involved in the assailed CA decision and resolution, the Court
finds no cogent reason to reverse the ruling of the CA.
Daabay was declared by the NLRC to have been lawfully dismissed by Coca-Cola on the grounds of serious misconduct,
breach of trust and loss of confidence. Our pronouncement in Philippine Airlines, Inc. v. NLRC31 on the issue of whether an
employee who is dismissed for just cause may still claim retirement benefits equally applies to this case. We held:
At the risk of stating the obvious, private respondent was not separated from petitioners employ due to mandatory or
optional retirement but, rather, by termination of employment for a just cause. Thus, any retirement pay provided by PALs
"Special Retirement & Separation Program" dated February 15, 1988 or, in the absence or legal inadequacy thereof, by
Article 287 of the Labor Code does not operate nor can be made to operate for the benefit of private respondent. Even
private respondents assertion that, at the time of her lawful dismissal, she was already qualified for retirement does not aid
her case because the fact remains that private respondent was already terminated for cause thereby rendering nugatory
any entitlement to mandatory or optional retirement pay that she might have previously possessed.32 (Citation omitted and
emphasis ours)
In ruling against the grant of the retirement benefits, we also take note of the NLRCs lone justification for the award, to wit:
Where from the facts obtaining, as in this case, there is a need to humanize the severe effects of dismissal and where
complainants entitlement to retirement benefits are even admitted in [Coca-Colas] motion to reduce bond, [w]e can do no
less but tilt the scales of justice in favor of labor as a measure of equity and compassionate social justice, taking into
consideration the circumstances obtaining in this case.33 (Emphasis ours)
Being intended as a mere measure of equity and social justice, the NLRCs award was then akin to a financial assistance
or separation pay that is granted to a dismissed employee notwithstanding the legality of his dismissal. Jurisprudence on
such financial assistance and separation pay then equally apply to this case. The Court has ruled, time and again, that
financial assistance, or whatever name it is called, as a measure of social justice is allowed only in instances where the
employee is validly dismissed for causes other than serious misconduct or those reflecting on his moral character.34 We
explained in Philippine Long Distance Telephone Company v. NLRC35:
[S]eparation pay shall be allowed as a measure of social justice only in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character. Where the reason for the
valid dismissal is, for example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual relations
with a fellow worker, the employer may not be required to give the dismissed employee separation pay, or financial
assistance, or whatever other name it is called, on the ground of social justice.
A contrary rule would, as the petitioner correctly argues, have the effect, of rewarding rather than punishing the erring
employee for his offense. And we do not agree that the punishment is his dismissal only and that the separation pay has
nothing to do with the wrong he has committed. Of course it has. Indeed, if the employee who steals from the company is

granted separation pay even as he is validly dismissed, it is not unlikely that he will commit a similar offense in his next
employment because he thinks he can expect a like leniency if he is again found out. This kind of misplaced compassion is
not going to do labor in general any good as it will encourage the infiltration of its ranks by those who do not deserve the
protection and concern of the Constitution.36 (Emphasis ours)
Clearly, considering that Daabay was dismissed on the grounds of serious misconduct, breach of trust and loss of
confidence, the award based on equity was unwarranted.1wphi1
Even the NLRCs reliance on the alleged admission by Coca-Cola in its motion to reduce bond that Daabay is entitled to
retirement benefits is misplaced. Apparently, the supposed admission by Coca-Cola was based on the following:
In support of its motion to reduce bond, Coca-cola seeks leniency for its failure to include in the posting of the bond the
monetary award for [Daabays] retirement benefits which, as directed by the Executive Labor Arbiter, should be computed
in accordance with the latest Collective Bargaining Agreement prior to his termination. Coca-Cola explains that the amount
of the retirement benefits has not been determined and there is a need to compute the same on appeal. x x x.37
It is patent that the statements made by Coca-Cola were in light of ELA Magbanuas ruling that Daabay was illegally
dismissed. Furthermore, any admission was only for the purpose of explaining the non-inclusion of the amount of retirement
benefits in the computation of the appeal bond posted with the NLRC. Coca-Colas statements should be taken in such
context, and could not be deemed to bind the company even after the NLRC had reversed the finding of illegal dismissal.
And although retirement benefits, where not mandated by law, may still be granted by agreement of the employees and
their employer or as a voluntary act of the employer,38 there is no proof that any of these incidents attends the instant case.
WHEREFORE, the petition is DENIED. The Decision dated June 24, 2011 and Resolution dated December 9, 2011 of the
Court of Appeals in CA-G.R. SP No. 03369-MIN are AFFIRMED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice

G.R. No. 200094

June 10, 2013

BENIGNO M. VIGILLA, ALFONSO M. BONGOT, ROBERTO CALLESA, LINDA C. CALLO, NILO B. CAMARA,
ADELIA T. CAMARA, ADOLFO G. PINON, JOHN A. FERNANDEZ, FEDERICO A. CALLO, MAXIMA P. ARELLANO,
JULITO B. COST ALES, SAMSON F. BACHAR, EDWIN P. DAMO, RENA TO E. FERNANDEZ, GENARO F.CALLO,
JIMMY C. ALETA, and EUGENIO SALINAS, Petitioners,
vs.
PHILIPPINE COLLEGE OFCRIMINOLOGY INC. and/or GREGORY ALAN F. BAUTISTA, Respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the September 16, 2011 Decision1 of
the Court of Appeals (CA), in CA-G.R. SP No. 120225, which affirmed the February 11, 2011 Resolution2 and the April 28,
20113 Resolution of the National Labor Relations Commission (NLRC). The two NLRC resolutions affirmed with
modifications the July 30, 2010 Decision4 of the Labor Arbiter (LA) finding that (a) Metropolitan Building Services, Inc.
(MBMSI) was a labor-only contractor; (b) respondent Philippine College of Criminology Inc. (PCCr) was the petitioners real
principal employer; and (c) PCCr acted in bad faith in dismissing the petitioners. The NLRC, however, declared that the
claims of the petitioners were settled amicably because of the releases, waivers and quitclaims they had executed.
The Antecedents
PCCr is a non-stock educational institution, while the petitioners were janitors, janitresses and supervisor in the Maintenance
Department of PCCr under the supervision and control of Atty. Florante A. Seril (Atty. Seril), PCCrs Senior Vice President
for Administration. The petitioners, however, were made to understand, upon application with respondent school, that they
were under MBMSI, a corporation engaged in providing janitorial services to clients. Atty. Seril is also the President and
General Manager of MBMSI.
Sometime in 2008, PCCr discovered that the Certificate of Incorporation of MBMSI had been revoked as of July 2, 2003.
On March 16, 2009, PCCr, through its President, respondent Gregory Alan F. Bautista (Bautista), citing the revocation,
terminated the schools relationship with MBMSI, resulting in the dismissal of the employees or maintenance personnel
under MBMSI, except Alfonso Bongot (Bongot) who was retired.
In September, 2009, the dismissed employees, led by their supervisor, Benigno Vigilla (Vigilla), filed their respective
complaints for illegal dismissal, reinstatement, back wages, separation pay (for Bongot), underpayment of salaries, overtime
pay, holiday pay, service incentive leave, and 13th month pay against MBMSI, Atty. Seril, PCCr, and Bautista.
In their complaints, they alleged that it was the school, not MBMSI, which was their real employer because (a) MBMSIs
certification had been revoked; (b) PCCr had direct control over MBMSIs operations; (c) there was no contract between
MBMSI and PCCr; and (d) the selection and hiring of employees were undertaken by PCCr.
On the other hand, PCCr and Bautista contended that (a) PCCr could not have illegally dismissed the complainants because
it was not their direct employer; (b) MBMSI was the one who had complete and direct control over the complainants; and
(c) PCCr had a contractual agreement with MBMSI, thus, making the latter their direct employer.
On September 11, 2009, PCCr submitted several documents before LA Ronaldo Hernandez, including releases, waivers
and quitclaims in favor of MBMSI executed by the complainants to prove that they were employees of MBMSI and not
PCCr.5 The said documents appeared to have been notarized by one Atty. Ramil Gabao. A portion of the releases, waivers
and quitclaims uniformly reads:
For and in consideration of the total amount of ______________, as and by way of separation pay due to the closure of the
Company brought about by serious financial losses, receipt of the total amount is hereby acknowledged, I
_______________, x x x forever release and discharge x x x METROPOLITAN BUILDING MAINTENANCE SERVICES,
INC., of and from any and all claims, demands, causes of actions, damages, costs, expenses, attorneys fees, and
obligations of any nature whatsoever, known or unknown, in law or in equity, which the undersigned has, or may hereafter
have against the METROPOLITAN BUILDING MAINTENANCE SERVICES, INC., whether administrative, civil or criminal,
and whether or not arising out of or in relation to my employment with the above company or third persons.6

Ruling of the Labor Arbiter

After due proceedings, the LA handed down his decision, finding that (a) PCCr was the real principal employer of the
complainants ; (b) MBMSI was a mere adjunct or alter ego/labor-only contractor; (c) the complainants were regular
employees of PCCr; and (d) PCCr/Bautista were in bad faith in dismissing the complainants.
The LA ordered the respondents (a) to reinstate petitioners except Bongot who was deemed separated/retired; (b) to pay
their full back wages from the date of their illegal dismissal until actual reinstatement (totaling P2,963,584.25); (c) to pay
Bongots separation or retirement pay benefit under the Labor Code (amounting to P254,010.00); (d) to pay their 3-year
Service Incentive Leave Pay (P4,245.60 each) except Vigilla (P5,141.40); (e) to pay all the petitioners moral and exemplary
damages in the combined amount of P150,000.00; and finally (f) to pay 10% of the total computable award as Attorneys
Fees.
The LA explained that PCCr was actually the one which exercised control over the means and methods of the work of the
petitioners, thru Atty. Seril, who was acting, throughout the time in his capacity as Senior Vice President for Administration
of PCCr, not in any way or time as the supposed employer/general manager or president of MBMSI.
Despite the presentation by the respondents of the releases, waivers and quitclaims executed by petitioners in favor of
MBMSI, the LA did not touch on the validity and authenticity of the same. Neither did he discuss the effects of such releases,
waivers and quitclaims on petitioners claims.
Ruling of the NLRC
Not satisfied, the respondents filed an appeal before the NLRC. In its Resolution, dated February 11, 2011, the NLRC
affirmed the LAs findings. Nevertheless, the respondents were excused from their liability by virtue of the releases, waivers
and quitclaims executed by the petitioners. Specifically, the NLRC pointed out:
As Respondent MBMSI and Atty. Seril, together are found to be labor only contractor, they are solidarily liable with
Respondent PCCr and Gregory Alan F. Bautista for the valid claims of Complainants pursuant to Article 109 of the Labor
Code on the solidary liability of the employer and indirect employer. This liability, however, is effectively expunged by the
acts of the 17 Complainants of executing Release, Waiver, and Quitclaims (pp. 170-184, Records) in favor of Respondent
MBMSI. The liability being joined, the release of one redounds to the benefit of the others, pursuant to Art. 1217 of the Civil
Code, which provides that "Payment made by one of the solidary debtors extinguishes the obligation. x x x."7
In their motion for reconsideration, petitioners attached as annexes their affidavits denying that they had signed the releases,
waivers, and quitclaims. They prayed for the reinstatement in toto of the July 30, 2010 Decision of the LA. 8 MBMSI/Atty.
Seril also filed a motion for reconsideration9 questioning the declaration of the NLRC that he was solidarily liable with PCCr.
On April 28, 2011, NLRC modified its February 11, 2011 Resolution by affirming the July 30, 2010 Decision10 of the LA only
in so far as complainants Ernesto B. Ayento and Eduardo B. Salonga were concerned. As for the other 17 complainants,
the NLRC ruled that their awards had been superseded by their respective releases, waivers and quitclaims.
The seventeen (17) complainants filed with the CA a petition for certiorari under Rule 65 faulting the NLRC with grave abuse
of discretion for absolving the respondents from their liability by virtue of their respective releases, waivers and quitclaims.
Ruling of the Court of Appeals
On September 16, 2011, the CA denied the petition and affirmed the two Resolutions of the NLRC, dated February 11,
2011 and April 28, 2011. The CA pointed out that based on the principle of solidary liability and Article 121711 of the New
Civil Code, petitioners respective releases, waivers and quitclaims in favor of MBMSI and Atty. Seril redounded to the
benefit of the respondents. The CA also upheld the factual findings of the NLRC as to the authenticity and due execution of
the individual releases, waivers and quitclaims because of the failure of petitioners to substantiate their claim of forgery and
to overcome the presumption of regularity of a notarized document. Petitioners motion for reconsideration was likewise
denied by the CA in its January 4, 2012 Resolution.
Hence, this petition under Rule 45 challenging the CA Decision anchored on the following

GROUNDS
The Hon. Court of Appeals COMMITTED REVERSIBLE ERRORS when:
A. IT CONSIDERED RESPONDENT METROPOLITAN BUILDING MAINTENANCE SERVICES, INC.S LIABILITY
AS SOLIDARY TO RESPONDENT PHILIPPINE COLLEGE OF CRIMINOLOGY, INC., WHEN IN FACT THERE IS
NO LEGAL BASIS TO THAT EFFECT.
B. IT DID NOT AFFIRM THE DECISION OF THE HON. LABOR ARBITER, DATED JULY 30, 2010, AS TO 17
PETITIONERS IN THIS CASE, DISREGARDING THE CORPORATION LAW AND JURISPRUDENCE OF THE
HON. SUPREME COURT IN SO FAR AS QUITLCLAIMS, RELEASE AND WAIVERS ARE CONCERNED IN
LABOR CASES.
C. IT AFFIRMED THE DECISION OF THE HON. NATIONAL LABOR RELATIONS COMMISSION, THAT THE 17
COMPLAINANTS HAVE SETTLED THEIR CLAIMS BY VIRTUE OF ALLEGED RELEASES, WAIVERS AND
QUITCLAIMS SIGNED BY THE COMPLAINANTS IN FAVOR OF METROPOLITAN BUILDING MAINTENANCE,
INC.
D. IT DID NOT TAKE INTO CONSIDERATION SUBSTANTIAL EVIDENCE OF PETITIONERS/COMPLAINANTS
DISPUTING THE ALLEGED WAIVERS, RELEASES AND QUITCLAIMS, INCLUDING THE ALLEGED
NOTARIZATION THEREOF.12
The petition fails.
The grounds cited by the petitioners boil down to this basic issue: whether or not their claims against the respondents were
amicably settled by virtue of the releases, waivers and quitclaims which they had executed in favor of MBMSI.
In resolving this case, the Court must consider three (3) important sub-issues, to wit:
(a) whether or not petitioners executed the said releases, waivers and quitclaims;
(b) whether or not a dissolved corporation can enter into an agreement such as releases, waivers and quitclaims
beyond the 3-year winding up period under Section 122 of the Corporation Code; and
(c) whether or not a labor-only contractor is solidarily liable with the employer.
The Releases, Waivers and Quitclaims are Valid
Petitioners vehemently deny having executed any release, waiver or quitclaim in favor of MBMSI. They insist that PCCr
forged the documents just to evade their legal obligations to them, alleging that the contents of the documents were written
by one person, whom they identified as Reynaldo Chavez, an employee of PCCr, whose handwriting they were familiar
with.13
To begin with, their posture was just an afterthought. Petitioners had several opportunities to question the authenticity of
the said documents but did not do so. The records disclose that during the proceedings before the LA, PCCr submitted
several documents, including the subject releases, waivers and quitclaims executed on September 11, 2009 in favor of
MBMSI,14 but petitioners never put their genuineness and due execution at issue. These were brought up again by the
respondents in their Memorandum of Appeal,15 but again petitioners did not bother to dispute them.
It was only after the NLRCs declaration in its February 11, 2011 Resolution that the claims of petitioners had been settled
amicably by virtue of the releases, waivers and quitclaims, that petitioners, in their motion for reconsideration,16 denied
having executed any of these instruments. This passiveness and inconsistency of petitioners will not pass the scrutiny of
this Court.
At any rate, it is quite apparent that this petition raises questions of fact inasmuch as this Court is being asked to revisit and
assess anew the factual findings of the CA and the NLRC regarding the validity, authenticity and due execution of the
subject releases, waivers and quitclaims.

Well-settled is the rule that this Court is not a trier of facts and this doctrine applies with greater force in labor cases.
Questions of fact are for the labor tribunals to resolve.17 Only errors of law are generally reviewed in petitions for review on
certiorari criticizing decisions of the CA. Moreover, findings of fact of quasi-judicial bodies like the NLRC, as affirmed by the
CA, are generally conclusive on this Court.18 Hence, as correctly declared by the CA, the following NLRC factual findings
are binding and conclusive on this Court:
We noted that the individual quitclaims, waivers and releases executed by the complainants showing that they received
their separation pay from MBMSI were duly notarized by a Notary Public. Such notarization gives prima facie evidence of
their due execution. Further, said releases, waivers, and quitclaims were not refuted nor disputed by complainants herein,
thus, we have no recourse but to uphold their due execution.19
Even if the Court relaxes the foregoing rule, there is still no reason to reverse the factual findings of the NLRC and the CA.
What is on record is only the self-serving allegation of petitioners that the releases, waivers and quitclaims were mere
forgeries. Petitioners failed to substantiate this allegation. As correctly found by the CA: "petitioners have not offered
concrete proof to substantiate their claim of forgery. Allegations are not evidence."20
On the contrary, the records confirm that petitioners were really paid their separation pay and had executed releases,
waivers and quitclaims in return. In his motion for reconsideration of the February 11, 2011 Resolution of the NLRC, Atty.
Seril, President and General Manager of MBMSI, stated that the amount of 2,000,000.00 "was coursed by PCCr to me, to
be handed to the complainants, through its employee, Rey Chavez."21
Petitioners requested the Court to take a look at such releases, waivers and quitclaims, particularly their contents and the
handwriting, but they failed to attach to the records copies of the said documents which they claimed to have been forged.
The petition is dismissible on this ground alone. The Rules of Court require the petition to be accompanied by such material
portions of the record as would support the petition.22 Failure to comply with the requirements regarding "the contents of
and the documents which should accompany the petition" is a ground for the dismissal of the appeal.23
Moreover, mere unsubstantiated allegations of lack of voluntariness in executing the documents will not suffice to overcome
the presumption of authenticity and due execution of a duly notarized document. As correctly held by the NLRC, "such
notarization gives prima facie evidence of their due execution."24
Petitioners contend that the alleged notarization of the releases, waivers and quitclaims by one Atty. Ramil Gabao did not
take place, because there were no records of such documents in the Notary Section of Manila. Thus, the prima facie
evidence thereof has been disputed.
The Court is not moved. Respondents should not be penalized for the failure of the notary public to submit his Notarial
Report. In Destreza v. Rinoza-Plazo,25 this Court stated that "the notarized deed of sale should be admitted as evidence
despite the failure of the Notary Public in submitting his notarial report to the notarial section of the RTC Manila." The Court
expounded:
It is the swearing of a person before the Notary Public and the latters act of signing and affixing his seal on the deed that
is material and not the submission of the notarial report. Parties who appear before a notary public to have their documents
notarized should not be expected to follow up on the submission of the notarial reports. They should not be made to suffer
the consequences of the negligence of the Notary Public in following the procedures prescribed by the Notarial Law.26
It would have been different if the notary public was not a lawyer or was not commissioned as such. In this regard, however,
petitioners offered no proof.
On the Revocation of MBMSIs Certificate of Incorporation
Petitioners further argue that MBMSI had no legal personality to incur civil liabilities as it did not exist as a corporation on
account of the fact that its Certificate of Incorporation had been revoked on July 2, 2003. Petitioners ask this Court to exempt
MBMSI from its liabilities because it is no longer existing as a corporation.
The Court cannot accommodate the prayer of petitioners.
The executed releases, waivers and quitclaims are valid and binding notwithstanding the revocation of MBMSIs Certificate
of Incorporation. The revocation does not result in the termination of its liabilities. Section 12227 of the Corporation Code

provides for a three-year winding up period for a corporation whose charter is annulled by forfeiture or otherwise to continue
as a body corporate for the purpose, among others, of settling and closing its affairs.
Even if said documents were executed in 2009, six (6) years after MBMSIs dissolution in 2003, the same are still valid and
binding upon the parties and the dissolution will not terminate the liabilities incurred by the dissolved corporation pursuant
to Sections 122 and 14528 of the Corporation Code. In the case of Premiere Development Bank v. Flores,29 the Court held
that a corporation is allowed to settle and close its affairs even after the winding up period of three (3) years. The Court
wrote:
As early as 1939, this Court held that, although the time during which the corporation, through its own officers, may conduct
the liquidation of its assets and sue and be sued as a corporation is limited to three years from the time the period of
dissolution commences, there is no time limit within which the trustees must complete a liquidation placed in their hands.
What is provided in Section 122 of the Corporation Code is that the conveyance to the trustees must be made within the
three-year period. But it may be found impossible to complete the work of liquidation within the three-year period or to
reduce disputed claims to judgment. The trustees to whom the corporate assets have been conveyed pursuant to the
authority of Section 122 may sue and be sued as such in all matters connected with the liquidation.
Furthermore, Section 145 of the Corporation Code clearly provides that "no right or remedy in favor of or against any
corporation, its stockholders, members, directors, trustees, or officers, nor any liability incurred by any such corporation,
stockholders, members, directors, trustees, or officers, shall be removed or impaired either by the subsequent dissolution
of said corporation." Even if no trustee is appointed or designated during the three-year period of the liquidation of the
corporation, the Court has held that the board of directors may be permitted to complete the corporate liquidation by
continuing as "trustees" by legal implication.30 [Emphases supplied; citations omitted]
A Labor-only Contractor is Solidarily Liable with the Employer
The issue of whether there is solidary liability between the labor-only contractor and the employer is crucial in this case. If
a labor-only contractor is solidarily liable with the employer, then the releases, waivers and quitclaims in favor of MBMSI
will redound to the benefit of PCCr. On the other hand, if a labor-only contractor is not solidarily liable with the employer,
the latter being directly liable, then the releases, waivers and quitclaims in favor of MBMSI will not extinguish the liability of
PCCr.
On this point, petitioners argue that there is no solidary liability to speak of in case of an existence of a labor-only contractor.
Petitioners contend that under Article 10631 of the Labor Code, a labor-only contractors liability is not solidary as it is the
employer who should be directly responsible to the supplied worker. They argue that Article 10932 of the Labor Code
(solidary liability of employer/indirect employer and contractor/subcontractor) and Article 1217 of the New Civil Code
(extinguishment of solidary obligation) do not apply in this case. Hence, the said releases, waivers and quitclaims which
they purportedly issued in favor of MBMSI and Atty. Seril do not automatically release respondents from their liability.
Again, the Court disagrees.
The NLRC and the CA correctly ruled that the releases, waivers and quitclaims executed by petitioners in favor of MBMSI
redounded to the benefit of PCCr pursuant to Article 1217 of the New Civil Code. The reason is that MBMSI is solidarily
liable with the respondents for the valid claims of petitioners pursuant to Article 109 of the Labor Code.
As correctly pointed out by the respondents, the basis of the solidary liability of the principal with those engaged in laboronly contracting is the last paragraph of Article 106 of the Labor Code, which in part provides: "In such cases labor-only
contracting, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to
the workers in the same manner and extent as if the latter were directly employed by him."
Section 19 of Department Order No. 18-02 issued by the Department of Labor and Employment (DOLE), which was still in
effect at the time of the promulgation of the subject decision and resolution, interprets Article 106 of the Labor Code in this
wise:
Section 19. Solidary liability. The principal shall be deemed as the direct employer of the contractual employees and
therefore, solidarily liable with the contractor or subcontractor for whatever monetary claims the contractual employees may
have against the former in the case of violations as provided for in Sections 5 (LaborOnly contracting), 6 (Prohibitions), 8
(Rights of Contractual Employees) and 16 (Delisting) of these Rules. In addition, the principal shall also be solidarily liable
in case the contract between the principal and contractor or subcontractor is preterminated for reasons not attributable to
the fault of the contractor or subcontractor. [Emphases supplied].

The DOLE recognized anew this solidary liability of the principal employer and the labor-only contractor when it issued
Department Order No. 18-A, series of 2011, which is the latest set of rules implementing Articles 106-109 of the Labor
Code. Section 27 thereof reads:
Section 27. Effects of finding of labor-only contracting and/or violation of Sections 7, 8 or 9 of the Rules. A finding by
competent authority of labor-only contracting shall render the principal jointly and severally liable with the contractor to the
latters employees, in the same manner and extent that the principal is liable to employees directly hired by him/her, as
provided in Article 106 of the Labor Code, as amended.
A finding of commission of any of the prohibited activities in Section 7, or violation of either Sections 8 or 9 hereof, shall
render the principal the direct employer of the employees of the contractor or subcontractor, pursuant to Article 109 of the
Labor Code, as amended. (Emphasis supplied.)
These legislative rules and regulations designed to implement a primary legislation have the force and effect of law. A rule
is binding on the courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory
authority granted by the legislature.33
Jurisprudence is also replete with pronouncements that a job-only contractor is solidarily liable with the employer. One of
these is the case of Philippine Bank of Communications v. NLRC34 where this Court explained the legal effects of a job-only
contracting, to wit:
Under the general rule set out in the first and second paragraphs of Article 106, an employer who enters into a contract with
a contractor for the performance of work for the employer, does not thereby create an employer-employees relationship
between himself and the employees of the contractor. Thus, the employees of the contractor remain the contractor's
employees and his alone. Nonetheless when a contractor fails to pay the wages of his employees in accordance with the
Labor Code, the employer who contracted out the job to the contractor becomes jointly and severally liable with his
contractor to the employees of the latter "to the extent of the work performed under the contract" as such employer were
the employer of the contractor's employees. The law itself, in other words, establishes an employer-employee relationship
between the employer and the job contractor's employees for a limited purpose, i.e., in order to ensure that the latter get
paid the wages due to them.
A similar situation obtains where there is "labor only" contracting. The "labor-only" contractor-i.e "the person or intermediary"
- is considered "merely as an agent of the employer." The employer is made by the statute responsible to the employees of
the "labor only" contractor as if such employees had been directly employed by the employer. Thus, where "labor-only"
contracting exists in a given case, the statute itself implies or establishes an employer-employee relationship between the
employer (the owner of the project) and the employees of the "labor only" contractor, this time for a comprehensive purpose:
"employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code." The law in
effect holds both the employer and the "laboronly" contractor responsible to the latter's employees for the more effective
safeguarding of the employees' rights under the Labor Code.35 [Emphasis supplied].
The case of San Miguel Corporation v. MAERC Integrated Services, Inc.36 also recognized this solidary liability between a
labor-only contractor and the employer. In the said case, this Court gave the distinctions between solidary liability in
legitimate job contracting and in labor-only contracting, to wit:
In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that
the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only
for the payment of the employees' wages whenever the contractor fails to pay the same. Other than that, the principal
employer is not responsible for any claim made by the employees.
On the other hand, in labor-only contracting, the statute creates an employer-employee relationship for a comprehensive
purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer
and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed
by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all
the rightful claims of the employees.37 [Emphases supplied; Citations omitted]
Recently, this Court reiterated this solidary liability of labor-only contractor in the case of 7K Corporation v. NLRC38 where
it was ruled that the principal employer is solidarily liable with the labor-only contractor for the rightful claims of the
employees.

Conclusion
Considering that MBMSI, as the labor-only contractor, is solidarily liable with the respondents, as the principal employer,
then the NLRC and the CA correctly held that the respondents solidary liability was already expunged by virtue of the
releases, waivers and quitclaims executed by each of the petitioners in favor of MBMSI pursuant to Article 1217 of the Civil
Code which provides that "payment made by one of the solidary debtors extinguishes the obligation."
This Court has constantly applied the Civil Code provisions on solidary liability, specifically Articles 1217 and 1222,39 to
labor cases. In Varorient Shipping Co., Inc. v. NLRC,40 this Court held:
The POEA Rules holds her, as a corporate officer, solidarily liable with the local licensed manning agency. Her liability is
inseparable from those of Varorient and Lagoa. If anyone of them is held liable then all of them would be liable for the same
obligation. Each of the solidary debtors, insofar as the creditor/s is/are concerned, is the debtor of the entire amount; it is
only with respect to his co-debtors that he/she is liable to the extent of his/her share in the obligation. Such being the case,
the Civil Code allows each solidary debtor, in actions filed by the creditor/s, to avail himself of all defenses which are derived
from the nature of the obligation and of those which are personal to him, or pertaining to his share [citing Section 1222 of
the Civil Code]. He may also avail of those defenses personally belonging to his co-debtors, but only to the extent of their
share in the debt. Thus, Varorient may set up all the defenses pertaining to Colarina and Lagoa; whereas Colarina and
Lagoa are liable only to the extent to which Varorient may be found liable by the court.1wphi1
xxxx
If Varorient were to be found liable and made to pay pursuant thereto, the entire obligation would already be extinguished
[citing Article 1217 of the Civil Code] even if no attempt was made to enforce the judgment against Colarina. Because there
existed a common cause of action against the three solidary obligors, as the acts and omissions imputed against them are
one and the same, an ultimate finding that Varorient was not liable would, under these circumstances, logically imply a
similar exoneration from liability for Colarina and Lagoa, whether or not they interposed any defense.41 [Emphases supplied]
In light of these conclusions, the Court holds that the releases, waivers and quitclaims executed by petitioners in favor of
MBMSI redounded to the respondents' benefit. The liabilities of the respondents to petitioners are now deemed
extinguished. The Court cannot allow petitioners to reap the benefits given to them by MBMSI in exchange for the releases,
waivers and quitclaims and, again, claim the same benefits from PCCr.
While it is the duty of the courts to prevent the exploitation of employees, it also behooves the courts to protect the sanctity
of contracts that do not contravene the law.42 The law in protecting the rights of the laborer authorizes neither oppression
nor self-destruction of the employer. While the Constitution is committed to the policy of social justice and the protection of
the working class, it should not be supposed that every labor dispute will be automatically decided in favor of labor.
Management also has its own rights, which, as such, are entitled to respect and enforcement in the interest of simple fair
play. Out of its concern for those with less privileges in life, the Court has inclined more often than not toward the worker
and upheld his cause in his conflicts with the employer. Such favoritism, however, has not blinded the Court to the rule that
justice is in every case for the deserving, to be dispensed in the light of the established facts and applicable law and
doctrine.43
WHEREFORE, the petition is DENIED.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice

G.R. No. 160138

January 16, 2013

AUTOMOTIVE ENGINE REBUILDERS, INC. (AER), ANTONIO T. INDUCIL, LOURDES T. INDUCIL, JOCELYN T.
INDUCIL and MA. CONCEPCION I. DONATO, Petitioners,
vs.
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD VILLOTA, FELINO E. AGUSTIN, RUPERTO
M. MARIANO II, EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.
MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R. NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA
BUENA, JR., HERMINIO P. PAPA, WILLIAM A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C.
CAAMPUED, ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO LUMBAO, JR., and RENATO
SARABUNO, Respondents.
x-----------------------x
G.R. No. 160192
PROGRESIBONG UNYON NG MGA MANGGAGAWA SA AER, ARNOLD VILLOTA, FELINO E. AGUSTIN, RUPERTO
M. MARIANO II, EDUARDO S. BRIZUELA, ARNOLD S. RODRIGUEZ, RODOLFO MAINIT, JR., FROILAN B.
MADAMBA, DANILO D. QUIBOY, CHRISTOPHER R. NOLASCO, ROGER V. BELATCHA, CLEOFAS B. DELA
BUENA, JR., HERMINIO P. PAPA, WILLIAM A. RITUAL, ROBERTO CALDEO, RAFAEL GACAD, JAMES C.
CAAMPUED, ESPERIDION V. LOPEZ, JR., FRISCO M. LORENZO, JR., CRISANTO LUMBAO, JR., and RENA TO
SARABUNO, Petitioners,
vs.
AUTOMOTIVE ENGINEREBUILDERS, INC., and ANTONIO T. INDUCIL, Respondents.
RESOLUTION
MENDOZA, J.:
For resolution is the Motion for Partial Reconsideration filed by Progresibong Unyon Ng Mga Manggagawa Sa AER (Unyon)
which questioned the Courts July 13, 2011 Decision insofar as it failed to award backwages to fourteen (14) of its members.
The decretal portion of the decision reads:
WHEREFORE, the petitions are DENIED. Accordingly, the complaining employees should be reinstated without
backwages. If reinstatement is no longer feasible, the concerned employees should be given separation pay up to the date
set for their return in lieu of reinstatement.1
In arriving at said determination, the Court found out both parties were at fault or in pari delicto and must bear the
consequences of their own wrongdoing.2 Thus, it decreed that the striking employees must be restored to their respective
positions prior to the illegal strike and illegal lockout.
Records disclose that this labor controversy started when both parties filed charges against each other, blaming the other
party for violating labor laws. Thirty-two (32) employees filed and signed a complaint,3 dated February 18, 1999, against
Automotive Engine Rebuilders, Inc. (AER). The complaint prayed that AER be declared guilty of Unfair Labor Practices,
Illegal Dismissal, Illegal Suspension, and Run-away shop; that the complainants be reinstated; and that they be paid "full
backwages and without loss of seniority rights and privileges, payment of wages during suspension, plus moral and
exemplary damages and attorneys fees."4
The names of the 32 complaining employees are as follows:
1. Felino Agustin
2. Ruperto Mariano II
3. Eduardo Brizuela
4. Otilio Rabino
5. Arnold Rodriguez

6. Froilan Madamba
7. Ferdinand Flores
8. Jonathan Taborda
9. Rodolfo Mainit, Jr.
10. Danilo Quiboy
11. Christopher Nolasco
12. Roger Belatcha
13. Claud Moncel
14. Cleofas dela Buena, Jr.
15. Edwin Mendoza
16. Herminio Papa
17. Oscar Macaranas
18. William Ritual
19. Roberto Caldeo
20. Rafael Gacad
21. James Caampued
22. Esperidion Lopez, Jr.
23. Frisco Lorenzo, Jr.
24. Bernardino Acosta, Jr.
25. Benson Pingol
26. Tammy Punsalan
27. Edward Ferrancol
28. Crisanto Lumbao, Jr.
29. Arnold Villota
30. Menching Mariano, Jr.
31. Carlos Carolino
32. Renato Sarabuno
Out of the 32, six (6) resigned and signed waivers and quitclaims, namely:

1. Oscar Macaranas
2. Bernardino Acosta
3. Ferdinand Flores
4. Benson Pingol
5. Otillo Rabino
6. Jonathan Taborda
On the other hand, the earlier complaint5 filed by AER against Unyon and eighteen (18) of its members for illegal concerted
activities prayed that, after notice and hearing, judgment be rendered as follows:
1. Finding respondents guilty of unfair labor practice and illegal concerted activity;
2. Finding respondents guilty of abandonment of work, serious misconduct, gross disrespect, commission of
felonies against the complainant and their respective officers, threats, coercion and intimidation;
3. Penalizing complainants with dismissal and/or termination of employment; and
4. Adjudging respondents to be jointly and solidarily liable to complainant for moral damages in the sum of
P500,000.00, exemplary damages in the sum of P500,000.00 and attorneys fees and costs.
The names of the 18 workers charged with illegal strike by AER are as follows:
1. Felino Agustin
2. Eduardo Brizuela
3. Otilio Rabino
4. Ferdinand Flores
5. Jonathan Taborda
6. Rodolfo Mainit, Jr.
7. Christopher Nolasco
8. Claud Moncel
9. Cleofas dela Buena
10. Herminio Papa
11. Oscar Macaranas
12. William Ritual
13. Rafael Gacad
14. James Caampued
15. Benson Pingol

16. Frisco Lorenzo, Jr.

17. Bernardino Acosta, Jr.
18. Esperidion Lopez, Jr.
AER likewise suspended seven (7) union members who tested positive for illegal drugs, namely:
1. Froilan Madamba
2. Arnold Rodriguez
3. Roberto Caldeo
4. Roger Bilatcha
5. Ruperto Mariano
6. Edwin Fabian
7. Nazario Madala
Out of the seven (7) suspended employees, only Edwin Fabian and Nazario Madala were allowed by AER to report back to
work. The other five (5) suspended employees were not admitted by AER without first submitting the required medical
certificate attesting to their fitness to work.
On August 9, 2001, after the parties submitted their respective position papers,6 the Labor Arbiter (LA) rendered a decision7
in favor of Unyon by directing AER to reinstate the concerned employees but without backwages effective October 16, 2001.
Both parties filed their respective appeals8 with the National Labor Relations Commission (NLRC).
On March 5, 2002, the NLRC issued its Resolution9 modifying the LA decision by setting aside the order of reinstatement
as it ruled out illegal dismissal. The NLRC likewise ruled that the concerned employees had no valid basis in conducting a
strike. On April 19, 2002, Unyon filed a motion for reconsideration10 insisting, among others, that AER was guilty of unfair
labor practice, illegal suspension and illegal dismissal. Unyon also argued that since AER charged only 18 of the 32
employees with illegal strike, the employees who were not included in the said charge should have been admitted back to
work by AER. Unyon also claimed that there was no allegation that these employees, who were not included in AERs
charge for illegal strike, were involved in the January 28, 1999 incident.11
After the denial of their motion for reconsideration, Unyon and the concerned employees filed a petition12 before the Court
of Appeals (CA). Unyon reiterated its argument that AER should admit back to work those excluded from its list of 18
employees charged with illegal strike.13
On June 27, 2003, the CA rendered a decision,14 the dispositive portion of which reads, as follows:
WHEREFORE, premises considered, the petition is GRANTED. Respondents are hereby directed to reinstate the
petitioners effective immediately but without backwages, except those who were tested positive for illegal drugs and have
failed to submit their respective medical certificates.
On October 1, 2003, ruling on the motion for partial reconsideration filed by Unyon, the CA rendered the assailed Amended
Decision,15 ordering the immediate reinstatement of all the suspended employees without backwages. Thus,
WHEREFORE, the partial motion for reconsideration is GRANTED insofar as the reinstatement of the suspended
employees is concerned. This Courts decision dated June 27, 2003 is hereby MODIFIED. Private respondents are hereby
directed to reinstate all petitioners immediately without backwages.
Unsatisfied, both parties filed the present consolidated petitions. Unyon argued that the CA erred in not awarding backwages
to the suspended employees who were ordered reinstated. AER, on the other hand, argued that the CA erred in ordering
the reinstatement of the suspended employees.

On July 13, 2011, this Court rendered a decision,16 the dispositive portion of which reads, as follows:
WHEREFORE, the petitions are DENIED. Accordingly, the complaining employees should be reinstated without
backwages. If reinstatement is no longer feasible, the concerned employees should be given separation pay up to the date
set for their return in lieu of reinstatement.
Unyon filed the subject Motion for Partial Reconsideration17 questioning the Courts July 13, 2011 Decision insofar as it
failed to award backwages to fourteen (14) of its members.
Unyon argues that backwages should have been awarded to the 14 employees who were excluded from the complaint filed
by AER and that the latter should have reinstated them immediately because they did not have any case at all.
AER was directed to file its comment. Its Comment,18 however, failed to address the issue except to say that the motion for
partial reconsideration was pro-forma.
After going over the records again, the Court holds that only nine (9) of the fourteen (14) excluded employees deserve to
be reinstated immediately with backwages.
Records disclose that thirty-two (32) employees filed a complaint for illegal suspension and unfair labor practice against
AER. Out of these 32 workers, only eighteen (18) of them were charged by AER with illegal strike leaving fourteen (14) of
them excluded from its complaint. The names of these 14 employees are as follows:
1. Ruperto Mariano II
2. Arnold Rodriguez
3. Froilan Madamba
4. Danilo Quiboy
5. Roger Belatcha
6. Edwin Mendoza
7. Roberto Caldeo
8. Tammy Punsalan
9. Edward Ferrancol
10. Crisanto Lumbao, Jr.
11. Arnold Villota
12. Menching Mariano, Jr.
13. Carlos Carolino
14. Renato Sarabuno
Technically, as no charges for illegal strike were filed against these 14 employees, they cannot be among those found guilty
of illegal strike. They cannot be considered in pari delicto. They should be reinstated and given their backwages.
Out of these 14 employees, however, five (5) failed to write their names and affix their signatures in the Membership
Resolution19 attached to the petition filed before the CA, authorizing Union President Arnold Villota to represent them. It
must be noted that Arnold Villota signed as the Affiant in the Verification and Certification by virtue of the Membership
Resolution.20 The names of these 5 employees are:

1. Edwin Mendoza
2. Tammy Punzalan
3. Edward Ferrancol
4. Menching Mariano, Jr.
5. Carlos Carolina
Because of their failure to affix their names and signatures in the Membership Resolution, Edwin Mendoza, Tammy
Punzalan, Edward Ferrancol, Menching Mariano, Jr. and Carlos Carolina cannot be granted the relief that Unyon wanted
for them in its Motion for Partial Reconsideration.
Only the following nine (9) employees who signed their names in the petition can be granted the relief prayed for therein,
namely:
1. Ruperto Mariano II
2. Arnold Rodriguez
3. Froilan Madamba
4. Danilo Quiboy
5. Roger Belatcha
6. Roberto Caldeo
7. Crisanto Lumbao, Jr.
8. Arnold Villota
9. Renato Sarabuno
These excluded nine (9) workers, who signed their names in their petition before the CA, deserve to be reinstated
immediately and gra:1ted backwages. It is basic in jurisprudence that illegally dismissed workers are entitled to
reinstatement with back wages pi us interest at the legal rate.21
As stated in the Amended Decision of the CA, which the Court effectively affirmed after denying the petition of both parties,
the reinstatement shall be "without prejudice to the right of private respondent AER to subject them for further medical
check-up to determine if subject petitioners are drug dependents."22
WHEREFORE, the Motion for Pa1iial Reconsideration filed by Progresibong Unyon Ng Mga Manggagawa Sa AER is
GRANTED only insofar as the nine (9) employees are concerned, namely: Ruperto Mariano II, Arnold Rodriguez, Froilan
Madamba, Danilo Quiboy, Roger Belateha, Roberto Caldeo, Crisanto Lumbao, Jr., Arnold Villota, and Renato
Sarabuno.1wphi1
Accordingly, the July 13, 2011 Decision is hereby MODIFIED in that the aforementioned nine (9) workers are entitled to be
reinstated and granted backwages with interest at the rate of six percent (6%) per annum which shall be increased to twelve
percent (12%) after the finality of this judgment.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice

G.R. No. 172589

August 8, 2010

JEFFREY NACAGUE, Petitioner,

vs.
SULPICIO LINES, INC., Respondent.
DECISION
CARPIO, J.:
The Case
This is a petition for review of the 23 January 2006 Decision and 19 April 2006 Resolution of the Court of Appeals in CAG.R. CEB SP No. 01065. In its 23 January 2006 Decision, the Court of Appeals dismissed the petition for certiorari filed by
petitioner Jeffrey Nacague (Nacague) and affirmed the 21 March 2005 Decision and 31 May 2005 Resolution of the National
Labor Relations Commission (NLRC) in NLRC Case No. V-000481-04. In its 19 April 2006 Resolution, the Court of Appeals
denied Nacagues motion for reconsideration.
The Facts
On 15 June 1995, respondent Sulpicio Lines, Inc. (Sulpicio Lines) hired Nacague as "hepe de viaje" or the representative
of Sulpicio Lines on board its vessel M/V Princess of the World (the ship).
On 25 January 2003, Sulpicio Lines received an anonymous letter reporting the use of illegal drugs on board the ship. On
14 February 2003, Ceasar T. Chico, a housekeeper on the ship, submitted a report regarding the drug paraphernalia found
inside the Mopalla Suite Room and the threat on his life made by Nacague and Chief Mate Reynaldo Doroon after he found
the drug paraphernalia.
On 15 February 2003, Sulpicio Lines sent a notice of investigation to Nacague informing him of the charges against him for
use of illegal drugs and threatening a co-employee.
When the ship docked in the port of Manila on 18 February 2003, some crew members of the ship, together with Nacague,
were subjected to a random drug test. They were taken to S.M. Lazo Medical Clinic (S.M. Lazo Clinic) and were required
to submit urine samples. The result of the random drug test revealed that Nacague was positive for methamphetamine
hydrochloride or shabu.
On 20 February 2003, Sulpicio Lines subjected Nacague to a formal investigation. Nacague denied using illegal drugs.
On 23 February 2003, Nacague went to Chong Hua Hospital in Cebu City to undergo a voluntary drug test. The drug test
with Chong Hua Hospital yielded a negative result. Nacague submitted this test result to Sulpicio Lines.
However, on 7 March 2003, Sulpicio Lines sent a memorandum to Nacague terminating him from the service. The
memorandum reads:
After a careful consideration of your case with the evidence available, including your explanation, and with the positive drug
test result, management finds you culpable of grave misconduct and loss of trust and confidence.
In view thereof, the company is constrained to terminate your employment effective today, March 7, 2003.
Feeling aggrieved, Nacague filed a complaint for illegal suspension, illegal dismissal and for reinstatement with backwages.
On 12 November 2003, Labor Arbiter Ernesto F. Carreon rendered a decision in favor of Nacague and declared that Sulpicio
Lines illegally dismissed Nacague. The dispositive portion of the Labor Arbiters 12 November 2003 Decision reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering the respondent Sulpicio Lines, Inc. to pay
complainant Jeffrey Nacague the following:

 Separation pay P75,600.00

Backwages

P77,415.00

Total

P153,015.00

The other claims are dismissed for lack of merit.

SO ORDERED.
According to the Labor Arbiter, the termination of employment of employees found positive for using illegal drugs should
not be exercised indiscriminately and thoughtlessly. The Labor Arbiter agreed with Nacague that the drug test result from
S.M. Lazo Clinic was questionable because the clinic is not accredited by the Dangerous Drug Board and not under its
supervision. The Labor Arbiter gave more weight to the drug test performed by Chong Hua Hospital because it was
accredited by the Dangerous Drug Board. The Labor Arbiter said that doubts must be resolved in favor of the employee.
The Labor Arbiter also ruled that reinstatement is no longer viable due to the strained relations between Nacague and
Sulpicio Lines and, thus, awarded separation pay to Nacague.
Dissatisfied with the Labor Arbiters Decision, Sulpicio Lines appealed to the NLRC. In its 21 March 2005 Decision, the
NLRC reversed the Labor Arbiters decision and dismissed Nacagues complaint for lack of merit.
According to the NLRC, since Nacague, who was performing a task involving trust and confidence, was found positive for
using illegal drugs, he was guilty of serious misconduct and loss of trust and confidence. The NLRC added that Sulpicio
Lines Code of Conduct specified that the penalty for the use and illegal possession of prohibited drugs is dismissal. The
NLRC also said that there is a presumption that S.M. Lazo Clinic is an accredited drug testing center and that it was
incumbent upon Nacague to show otherwise.
Nacague filed a motion for reconsideration. In its 31 May 2005 Resolution, the NLRC denied Nacagues motion.
Nacague filed a petition for certiorari with the Court of Appeals. Nacague alleged that the NLRC gravely abused its discretion
when it declared that Sulpicio Lines validly terminated his employment.
The Ruling of the Court of Appeals
According to the Court of Appeals, Sulpicio Lines complied with both the procedural and substantive requirements of the
law when it terminated the employment of Nacague. The Court of Appeals said that the positive result of the S.M. Lazo
Clinic drug test was the main basis of Sulpicio Lines in terminating Nacagues employment. The Court of Appeals declared
that the evidence presented by Sulpicio Lines was sufficient to justify the conclusion that Nacague committed serious
misconduct and a breach of trust and confidence warranting his dismissal from employment. The Court of Appeals agreed
with the NLRC that Nacague failed to prove his allegation that S.M. Lazo Clinic lacks accreditation. On the procedural
requirements, the Court of Appeals found that Sulpicio Lines complied with the twin-notice requirements and conducted a
formal hearing.
Nacague filed a motion for reconsideration. In its 19 April 2006 Resolution, the Court of Appeals denied the motion.
Hence, this petition.
The Issue
Nacague raises the sole issue of whether the Court of Appeals erred in ruling that his termination from employment was
valid.
The Ruling of the Court
The petition is meritorious.
Nacague maintains that the S.M. Lazo Clinic drug test was not credible because Sulpicio Lines failed to show that S.M.
Lazo Clinic is an authorized drug testing center. Nacague also alleges that the urine samples were gathered carelessly

without proper labels to identify their owners and that S.M. Lazo Clinic did not ask Nacague if he was taking any medication
that might alter the results of the drug test. Nacague adds that Republic Act No. 9165 (R.A. No. 9165) and the Department
of Labor and Employment Order No. 53-03 (Department Order No. 53-03) require two drug tests a screening test and a
confirmatory test. Nacague maintains that, since only a screening test was conducted, he was illegally dismissed based on
an incomplete drug test. Nacague argues that Sulpicio Lines failed to discharge its burden of proving that the termination of
his employment was legal.
On the other hand, Sulpicio Lines questions the belated attempt of Nacague to question the credibility of S.M. Lazo Clinic.
Sulpicio Lines also argues that since Nacague knew that the residue of the drug would no longer be detectable in his body
after five days, Nacague underwent another drug test with the Chong Hua Hospital. Sulpicio Lines insists that the most
accurate drug test is the random drug test conducted by S.M. Lazo Clinic and that the test with Chong Hua Hospital was a
"planned" test.
Under Article 279 of the Labor Code, an employer may terminate the services of an employee for just causes or for
authorized causes. Furthermore, under Article 277(b) of the Labor Code, the employer must send the employee who is
about to be terminated, a written notice stating the causes for termination and must give the employee the opportunity to be
heard and to defend himself. Thus, to constitute valid dismissal from employment, two requisites must concur: (1) the
dismissal must be for a just or authorized cause; and (2) the employee must be afforded an opportunity to be heard and to
defend himself.
Contrary to Sulpicio Lines allegation, Nacague was already questioning the credibility of S.M. Lazo Clinic as early as the
proceedings before the Labor Arbiter. In fact, the Labor Arbiter declared that the S.M. Lazo Clinic drug test result was
doubtful since it is not under the supervision of the Dangerous Drug Board.
The NLRC and the Court of Appeals ruled that Sulpicio Lines validly terminated Nacagues employment because he was
found guilty of using illegal drugs which constitutes serious misconduct and loss of trust and confidence. However, we find
that Sulpicio Lines failed to clearly show that Nacague was guilty of using illegal drugs. We agree with the Labor Arbiter that
the lack of accreditation of S.M. Lazo Clinic made its drug test results doubtful.
Section 36 of R.A. No. 9165 provides that drug tests shall be performed only by authorized drug testing centers. Moreover,
Section 36 also prescribes that drug testing shall consist of both the screening test and the confirmatory test. Section 36 of
R.A. No. 9165 reads:
SEC. 36. Authorized Drug Testing. Authorized drug testing shall be done by any government forensic laboratories or by
any of the drug testing laboratories accredited and monitored by the DOH to safeguard the quality of test results.
The DOH shall take steps in setting the price of the drug test with DOH accredited drug testing centers to further reduce the
cost of such drug test. The drug testing shall employ, among others, two (2) testing methods, the screening test which will
determine the positive result as well as the type of drug used and the confirmatory test which will confirm a positive screening
test. x x x (Emphasis supplied)
Department Order No. 53-03 further provides:
Drug Testing Program for Officers and Employees
Drug testing shall conform with the procedures as prescribed by the Department of Health (DOH)
(www.doh.gov.ph). Only drug testing centers accredited by the DOH shall be utilized. A list of accredited
centers may be accessed through the OSHC website (www.oshc.dole.gov.ph).
Drug testing shall consist of both the screening test and the confirmatory test; the latter to be carried
out should the screening test turn positive. The employee concerned must be informed of the test results
whether positive or negative. (Emphasis supplied)
In Social Justice Society v. Dangerous Drugs Board, we explained:
As to the mechanics of the test, the law specifies that the procedure shall employ two testing methods, i.e., the screening
test and the confirmatory test, doubtless to ensure as much as possible the trustworthiness of the results. But the more
important consideration lies in the fact that the tests shall be conducted by trained professionals in access-controlled
laboratories monitored by the Department of Health (DOH) to safeguard against results tampering and to ensure an accurate
chain of custody.

The law is clear that drug tests shall be performed only by authorized drug testing centers.1avvphi1 In this case, Sulpicio
Lines failed to prove that S.M. Lazo Clinic is an accredited drug testing center. Sulpicio Lines did not even deny Nacagues
allegation that S.M. Lazo Clinic was not accredited. Also, only a screening test was conducted to determine if Nacague was
guilty of using illegal drugs. Sulpicio Lines did not confirm the positive result of the screening test with a confirmatory test.
Sulpicio Lines failed to indubitably prove that Nacague was guilty of using illegal drugs amounting to serious misconduct
and loss of trust and confidence. Sulpicio Lines failed to clearly show that it had a valid and legal cause for terminating
Nacagues employment. When the alleged valid cause for the termination of employment is not clearly proven, as in this
case, the law considers the matter a case of illegal dismissal.
We agree with the Labor Arbiter that Nacagues reinstatement is no longer feasible due to strained relations between
Nacague and Sulpicio Lines and that Nacague should instead be granted separation pay.
WHEREFORE, we GRANT the petition. We SET ASIDE the 23 January 2006 Decision and the 19 April 2006 Resolution of
the Court of Appeals in CA-G.R. CEB SP No. 01065. We REINSTATE the 12 November 2003 Decision of the Labor Arbiter.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

G.R. No. 197384

January 30, 2013

SAMPAGUITA AUTO TRANSPORT CORPORATION, Petitioner,

vs.
NATIONAL LABOR RELATIONS COMMMISSION and EFREN I. SAGAD, Respondents.
DECISION
BRION, J.:
Before the Court is the petition for review on certiorari1 in caption, assailing the decision2 dated March 4, 2011 and the
resolution3 dated June 13, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 112760.
The Antecedents
In a complaint4 dated August 10, 2007, respondent Efren I. Sagad charged the petitioner Sampaguita Auto Transport
Corporation (company); Andy Adagio, President and General Manager; Monina Ariola Adagio, Vice-President and Finance
Manager; Virgilio Olunan (referred to as Olonan by Sagad), Operations Manager; and Gerry Dimate, HRO Officer, with
illegal dismissal and damages plus attorney's fees.
Sagad alleged that on May 14, 2006, the company hired him as a regular bus driver, not as a probationary employee as the
company claimed. He disowned his purported signature on the contract of probationary Employment5 submitted in evidence
by the company. He maintained that his signature was forged. He further alleged that on November 5, 2006, he was
dismissed by the company for allegedly conniving with conductor Vitola in issuing tickets outside their assigned route.
The company countered that it employed Sagad as a probationary bus driver (evidenced by a probationary employment
contract6) from May 14, 2006 to October 14, 2006; he was duly informed of his corresponding duties and responsibilities.7
He was further informed that during the probationary period, his attendance, performance and work attitude shall be
evaluated to determine whether he would qualify for regular employment. For this purpose and as a matter of company
policy, an evaluator was deployed on a company bus (in the guise of a passenger) to observe the drivers work performance
and attitude.
Allegedly, on September 21, 2006, an evaluator boarded Sagads bus. The evaluator described Sagads manner of driving
as "reckless driver, nakikipaggitgitan, nakikipaghabulan, nagsasakay sa gitna ng kalsada, sumusubsob ang pasahero."8
Sagad disputed the evaluators observations. In an explanation (rendered in Filipino),9 he claimed that he could not have
been driving as reported because his wife (who was pregnant) and one of his children were with him on the bus. He admitted
though that at one time, he chased an "Everlasting" bus to serve warning on its driver not to block his bus when he was
overtaking. He also admitted that once in a while, he sped up to make up for lost time in making trips.
The company further alleged that on October 13, 2006, it conducted a thorough evaluation of Sagads performance. It
requested conductors who had worked with Sagad to comment on his work. Conductors A. Hemoroz and Israel Lucero
revealed that Sagad proposed that they cheat on the company by way of an unreported early bus trip.10 Dispatcher E.
Castillo likewise submitted a negative report and even recommended the termination of Sagads employment.11 The
company also cited Sagads involvement in a hit-and-run accident on September 9, 2006 along Commonwealth Avenue in
Quezon City while on a trip (bus with Plate No. NYK-216 and Body No. 3094).12 Allegedly, Sagad did not report the accident
to the company.
On October 15, 2006, upon conclusion of the evaluation, the company terminated Sagads employment for his failure to
qualify as a regular employee.13
The Compulsory Arbitration Rulings
In her decision dated May 8, 2008,14 Labor Arbiter Marita V. Padolina dismissed the complaint for lack of merit. She ruled
that the company successfully proved that Sagad failed to qualify as a regular employee. Labor Arbiter Padolina stressed
that on October 15, 2006, the company ordered Sagad not to work anymore as his probationary employment had expired.
While Sagad claimed that he worked until November 5, 2006, she pointed out that "there is no record to show that he worked
beyond October 14, 2006."15

Sagad appealed the Labor Arbiters ruling. On July 10, 2009, the National Labor Relations Commission (NLRC) rendered
a decision16 declaring that Sagad had been illegally dismissed. It held that Sagad was not a probationary employee as the
company failed to prove by substantial evidence the due execution of Sagads supposed probationary employment contract.
It found credible Sagads submission that his signature on the purported contract was a forgery. It opined that his signature
on the contract was "extremely different" from his signatures in his pleadings and in other documents on record. Further,
the NLRC brushed aside the company memorandum dated October 15, 200617 supposedly terminating Sagads
probationary employment as there was no showing that the memorandum had been served on him.
The NLRC disregarded Sagads alleged infractions that served as grounds for the termination of his employment, holding
that his dismissal was not based on these infractions but on his alleged connivance with a conductor in defrauding the
company. The NLRC awarded Sagad backwages of P559,050.00 and separation pay of P45,000.00 in lieu of reinstatement,
in view of the strained relations between the parties resulting from the filing of the complaint.
Both parties moved for reconsideration of the NLRC decision, to no avail. The company then elevated the case to the CA
through a petition for certiorari under Rule 65 of the Rules of Court.
The CA Decision
The CA, in its currently assailed decision,18 affirmed the NLRC rulings in toto, finding no grave abuse of discretion in the
labor tribunals reversal of the labor arbiters dismissal of the complaint. It found the "genuineness of respondents signature
on the employment contract is tainted with doubt."19 It agreed with the NLRC that Sagad had been illegally dismissed
considering, as it noted, that the grounds the company relied upon for the termination of Sagads employment were not
among the causes for a valid dismissal enumerated under Article 282 of the Labor Code. It added that even if it had been
otherwise, the company failed to comply with the twin-notice requirement in employee dismissals.
The Petition
The company seeks the reversal of the appellate courts decision through the present appeal,20 and raises the following
issues:
1. Whether it dismissed Sagad illegally; and
2. Whether Sagad is entitled to backwages and separation pay, totaling P604,050.00, after working with the
company for barely five months.
The company insists that Sagad entered into a contract of probationary employment with it. It was thus surprised with
Sagads allegation that his signature appearing in the contract was a forgery. It explained that his signature on the contract
is the same as his signatures on his employment papers (which include the probationary employment contract). In any
event, it faults the NLRC for not considering other pieces of evidence indicating Sagads actual employment status.
The company points out that one such piece of competent and compelling evidence is Sagads admission of the nature of
his employment expressed in his letter dated October 16, 2006, addressed to Adagio and Olunan.21 In this letter, he asked
for another chance to work with the company.
The company posits that with the letter, Sagad acknowledged that his probationary employment had expired.22
The company maintains that it terminated Sagads employment in good faith. They are not expected to follow the procedure
for dismissing a regular employee, as the NLRC opined, considering that Sagad was merely on probation. Lastly, it contends
that the award of backwages and separation pay to Sagad amounting to P604,050.00 is unwarranted and confiscatory since
he worked for only five months. It laments that the award would put a premium on reckless driving and would encourage
other drivers to follow Sagads example.
The company disputes the NLRCs basis for the award Sagads purported average daily commission of P1,000.00 as
non-existent. They contend in this respect that the payslips Sagad submitted to the NLRC rarely showed his daily
commission to reach P1,000.00. It explains that Sagad presented only one (1) payslip for November 2006, five (5) for
October 2006, one (1) each for July, August and September 2006. It posits that the company payrolls from June 29, 2006
to October 8, 2006 showed that his daily commissions were below P1,000.00.

The Case for Sagad

Through his Comment (on the Petition),23 Sagad asks that the petition be denied due course. He presents the following
arguments:
1. He was not a probationary employee. The signature on the alleged probationary employment contract attributed
to him was not his; it was a forgery, as confirmed by the NLRC and the CA. The same thing is true with the supposed
letter (dated October 16, 2006)24 in which he allegedly appealed to be given another chance to work for the
company. Not only was the letter not in his handwriting (it allegedly belonged to Vitara, a bus conductor of the
company), the signature on the letter attributed to him was also falsified.
2. On the assumption that he was a probationary employee, it is not correct to say that he failed to qualify for regular
employment. The written statements of bus conductors Hemoroz and Lucero25 regarding his alleged attempt to
cheat on the company are without probative value. The statements were not under oath and the irregular acts he
allegedly proposed could only be done by the conductors.
The companys claim that he figured in a "hit-and-run" accident on September 9, 2006, which he allegedly did not report to
management, is not also correct. It was not his bus that was involved in the accident that he duly reported to the
management. Further, the companys contention that he drove recklessly on September 16, 2006 cannot be used to support
his dismissal as he had already been penalized for the incident with a five-day suspension.26
Also, the company grounds in Castillos evaluation report27 (that the company relied upon to justify the non-renewal of his
contract) are not just causes for the termination of his employment as the CA correctly ruled.
3. He was a regular employee. He continued to work as driver until November 4, 2006. The companys notice of
termination of his Employment28 was not served on him because no such letter existed. If his probationary
employment was to expire on October 14, 2006, he asks: why was he evaluated only on October 13 and 14, 2006
and why did the company serve him the termination notice only on October 15, 2006, when he was supposed to
have been separated the previous day, October 14, 2006? He adds: when was the notice served on him that would
have prompted him to write the company a letter on October 16, 2006 to ask for a second chance? All these nagging
questions, he stresses, demonstrate the incredibility of the companys claim that he was a probationary employee.
4. He does not have to prove his denial that the signatures on the above-mentioned documents were not really his.
He posits that evidence need not be given in support of a negative allegation and this is particularly true in dismissal
cases where the burden of proof is on the employer.
5. The petition suffers from a procedural defect as it raises only questions of fact and not of law, in violation of Rule
45 of the Rules of Court.
The Courts Ruling
The procedural issue
This Court, as a rule, only reviews questions of law in a Rule 45 petition for review. In labor cases, the factual findings of
the labor arbiter and of the NLRC are generally respected and, if supported by substantial evidence, accorded finality. This
rule, however, is not absolute. When the factual findings of the CA conflict with those of the labor authorities, the Court is
forced to review the evidence on record.29
In this case, the labor arbiters factual conclusions, on the one hand, and those of the NLRC and the CA, on the other hand,
differ. The labor arbiter found that Sagad was a probationary employee and was validly dismissed for his failure to qualify
for regular employment, whereas the NLRC and the CA concluded that he was a regular employee and was illegally
dismissed. We thus find the need to review the facts in the present labor dispute.
The merits of the case
After a review of the records, we are convinced that Sagad was dismissed, not as a probationary employee, but as one who
had attained regular status. The companys evidence on Sagads purported hiring as a probationary employee is
inconclusive. To start with, Sagad denied that he entered into a probationary employment contract with the company,
arguing that the signature on the supposed contract was not his.30 He also denied receiving the alleged notice31 terminating

his probationary employment. The same thing is true with his purported letter32 asking that he be given another chance to
work for the company. He asserts that not only is the letter not in his handwriting, the signature on the letter was also not
his.
The submissions of the parties on the issue created a doubt on whether Sagad really entered into a probationary
employment contract with the company. The NLRC resolved the doubt in Sagads favor, ruling that Sagads signature on
the contract was not his, because it was a forgery. It declared that his signature on the contract "is extremely different from
those in his pleadings and from the other documents on record,"33 without explaining how and why the two sets of signatures
were vastly different. Lending further support to the NLRC conclusion, which the CA upheld, is its finding that the company
failed to refute Sagads denial of his signature in the contract, which the labor tribunal considered as an admission of the
veracity of Sagads statement, pursuant to the Rules of Court.34
Independently of the above discussion and even if we were to consider that Sagad went through a probationary period, the
records indicate that he was retained even beyond the expiration of his supposed probationary employment on October 14,
2006. As the NLRC noted, Sagad claimed that he was dismissed by the company on November 5, 2006, after he was
accused of conniving with conductor Vitola in issuing tickets outside their assigned route.
The company never refuted this particular assertion of Sagad and its silence can only mean that Sagad remained in
employment until November 4, 2006, thereby attaining regular status as of that date. Under the law, "an employee who is
allowed to work after a probationary period shall be considered a regular employee."35
Further, when the company questioned the payslips submitted by Sagad to substantiate his claim that he earned on the
average a daily commission of P1,000.00, it pointed out that Sagad presented only one (1) payslip for the whole month of
November 2006, five (5) payslips for the month of October 2006, and one (1) payslip each for the months of July, August
and September 2006.36 This seemingly harmless allegation is significant in that it revealed that Sagad continued working
until the first week of November 2006 and was paid his salary for at least one payroll period. Sagad, therefore, had become
a regular employee when he was dismissed on November 5, 2006.
Is Sagads dismissal illegal?
The NLRC and the CA ruled in the affirmative. The labor tribunal opined that the infractions which Sagad allegedly committed
and which disqualified him from attaining regular status are "unavailing" with respect to his dismissal because the dismissal
was not based on those infractions but on his alleged connivance with conductor Vitola to cheat on the company.
The CA concurred with the NLRC but for a different reason. It declared that the "grounds upon which petitioners based
respondents termination from employment, viz: hindi lahat ng schedule nailalabas, mababa ang revenue ng bus, laging
kasama ang asawa sa byahe and maraming naririnig na kwento tungkol sa kanya, nag-uutos ng conductor para kumita sa
hindi magandang paraan, xxx are not among those enumerated under Article 282 of the Labor Code as just causes for
termination of employment."37 The CA added that on the assumption that the cited grounds can be considered just causes,
the company nonetheless failed to comply with the twin-notice requirement for the termination of Sagads employment.
We disagree with the finding that Sagads dismissal had no basis.
First. It is not disputed that the company called Sagads attention to his negative actuations as a bus driver, which were
reported by a company evaluator38 who boarded his bus on September 21, 2006. The evaluator reported that he was driving
recklessly, racing and jostling for position on the road, thereby jarring the passengers on their seats, and picking up
passengers on the middle of the road. He disputed the evaluators observations,39 claiming that he could not have been
driving as reported because his pregnant wife and one of his children were with him on the bus at the time. He admitted,
however, that on one occasion, he chased an "Everlasting" bus to warn its driver not to block him. He also admitted that
once in a while, he sped up to compensate for lost time in his trips.
Sagads explanation reveals more than what it stated. During his brief employment with the company, he exhibited the
tendency to speed up when he finds the need for it, very obviously in violation of traffic rules, regulations and company
policy. Instead of negating the evaluators observations, his admissions make them credible.
Second. He was also asked to react to the comments of conductors who had worked with him (Hemoroz and Lucero) to the
effect that he proposed to them that they cheat on the company by making early (but not to be reported) bus trips.40 Further,
there was Castillos evaluation dated

October 13, 2006,41 rating Sagads work performance as poor on account of: (1) the low revenue of Sagads bus; (2) his
inability to make all his scheduled trips; and (3) his habit of bringing his wife with him on his trips. Castillo also heard of talks
of Sagads orders to the conductors to earn money in a questionable way.
During the arbitration, Sagad disputed the conductors comments, maintaining that they were not under oath and that the
fraudulent proposal they mentioned could only be committed by conductors. With respect to Castillos evaluation, Sagad
invoked the CAs pronouncement that the infractions mentioned in the report are not just causes for the termination of his
employment.
Sagads position fails to convince us. We find no evidence that Hemoroz and Lucero had an ax to grind against Sagad so
that they would lie about their impression of him as a bus driver. Significantly, their statements validate Castillos own
observation that he heard talks of Sagads orders to the conductors for them to cheat on the company. The scheme, contrary
to Sagads explanation, can only be committed with the cooperation, or even at the behest, of the driver, as the proposed
scheme is for the bus to make unscheduled, but unreported, early trips.
Lastly, the company cites Sagads involvement in a hit-and-run incident on September 9, 2006 while driving his assigned
bus (with Plate No. NYK-216 and Body No. 3094).42 Once more, he denies the charge, claiming that it was not his bus, but
two other vehicles, a Honda City and an Elf truck, which figured in the incident.43 To prove his point, he submitted the
"SALAYSAY"44 of his replacement driver, Carlito Laude, for September 10, 2006, saying that there was no dents or
scratches on the bus.
Again, Sagads stance fails to persuade us. Sagads statements vis--vis the incident, as well as those of Laude, are belied
by the Traffic Accident Investigation Report45 which mentioned the "Unidentified driver of Public Utility Bus with plate No.
NYK-216 and Body No. 3094." The report was corroborated by the sworn statements of Ronald Apura, driver of the Elf
truck, UFF-597, the second party in the incident,46 and Bibiana Fuentes, driver of the White Honda City, WDV-422 (owned
by Purefoods Hormel Co.), the first party in the vehicular accident. There was also the letter to the company of Standard
Insurance Co., Inc. dated February 14, 200747 demanding the reimbursement of P24,667.54 it paid to Purefoods Hormel
Co. by way of damages sustained by the Honda City.
Third. The CA misappreciated the law when it declared that the grounds relied upon by the company in terminating Sagads
employment are not among those enumerated under Article 282 of the Labor Code as just causes for employee
dismissals.1wphi1 Article 282 of the Code provides:
Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative
in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member
of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing. [emphasis supplied]
The irregularities or infractions committed by Sagad in connection with his work as a bus driver constitute a serious
misconduct or, at the very least, conduct analogous to serious misconduct, under the above-cited Article 282 of the Labor
Code. To be sure, his tendency to speed up during his trips, his reckless driving, his picking up passengers in the middle of
the road, his racing with other buses and his jostling for vantage positions do not speak well of him as a bus driver. While
he denies being informed, when he was hired, of the duties and responsibilities of a driver contained in a document
submitted in evidence by the company48 the requirement "3. to obey traffic rules and regulations as well as the company
policies. 4. to ensure the safety of the riding public as well as the other vehicles and motorist (sic)"49 is so fundamental and
so universal that any bus driver is expected to satisfy the requirement whether or not he has been so informed.
Sagad tries to minimize the adverse effect of the evaluators report of September 21, 2006 about his conduct as a driver
with the argument that he had already been penalized with a five-day suspension for chasing an "Everlasting" bus at one

time. The suspension is of no moment. He was penalized for one reckless driving incident, but it does not erase all the other
infractions he committed. The conductors comments and the dispatchers evaluation, together with the earlier on-board
evaluation, all paint a picture of a reckless driver who endangers the safety of his passengers, other motorists and the
general public. With this record, it is not surprising that he figured in a hit-and-run accident on September 9, 2006.
Under the circumstances, Sagad has become a liability rather than an asset to his employer, more so when we consider
that he attempted to cheat on the company or could have, in fact, defrauded the company during his brief tenure as a bus
driver. This calls to mind Castillos report on the low revenue of Sagads bus, an observation which is validated by the
companys Daily Operation Reports from June to October 2006.50
All told, we find substantial evidence supporting Sagads removal as a bus driver. Through his reckless driving and his
schemes to defraud the company, Sagad committed serious misconduct and breach of the trust and confidence of his
employer, which, without doubt, are just causes for his separation from the service. It is well to stress, at this point, an earlier
pronouncement of the Court "that justice is in every case for the deserving, to be dispensed in the light of the established
facts and applicable law and doctrine."51
The twin-notice requirement
Even as we find a just cause for Sagads dismissal, we agree with the CA that the company failed to comply with the twonotice rule. It failed to serve notice of: (1) the particular acts for which Sagad was being dismissed on November 5, 2006
and (2) his actual dismissal. Consistent with our ruling in Agabon v. NLRC, 52 we hold that the violation of Sagad's right to
procedural due process entitles him to an indemnity in the form of nominal damages. Considering the circumstances in the
present case, we deem it appropriate to award Sagad P30,000.00.
WHEREFORE, premises considered, the appeal is granted. The assailed decision and resolution of the Court of Appeals
are SET ASIDE. The complaint is DISMISSED for lack of merit. Efren I. Sagad is awarded nominal damages of P30,000.00
for violation of his right to procedural due process.
SO ORDERED.
ARTURO D. BRION
Associate Justice